Berkeley Group maintains profit plan amid UK housing market caution

Berkeley Group has reiterated its four-year profit plan to deliver £1.4bn in pre-tax profit, despite ongoing caution in the UK housing market. The London-focused housebuilder noted that while enquiries remain stable, buyers without an immediate need to move are hesitant due to economic uncertainty, political developments, and the ongoing conflict in the Middle East.

The company warned that some customers may defer purchases until after the government’s upcoming Budget at the end of October. To stimulate the sector, Berkeley is calling for significant stamp duty reform. Specifically, the group proposes capping stamp duty land tax at 1% for first-time buyers and downsizers, while also advocating for the removal of the 5% surcharge on investors.

Berkeley described current stamp duty levels as a ‘binding constraint’ on demand. The company previously announced plans to reduce production by approximately 25% over four years to prioritize cash generation, following a 14.7% drop in pre-tax profit for the year ending August 31.