Shares in housebuilders including Taylor Wimpey, Barratt and Persimmon drop after Berkeley warns it can’t ramp up production

Shares in housebuilders dropped this morning after Berkeley said today it would not be able to ramp up production of homes, as it remained hampered by planning constraints.

Taylor Wimpey, Barratt and Persimmon were among the fallers this morning, taking an early dip after Berkeley’s trading update.

Shares in Berkeley meanwhile dropped more steeply and were down nearly six per cent in morning trading.

Read more: Berkeley says its feels unable to ramp up homebuilding beyond current plans

Berkeley had said today that the operating environment in London and south east did not support the step-up in production levels that these markets “so badly need”.

In a trading update spanning 1 November to 28 February, Berkeley said it had continued to trade in line with its business plan requirements, with sale prices achieved staying above levels set in the plan.

Market conditions in London and the south east are unchanged from the first half, with the housebuilder saying home movers and downsizers continued to be constrained “by high transaction costs, the 4.5x income multiple limit on mortgage borrowing and prevailing economic uncertainty”.

That alongside the changing planning environment and complexity of getting on-site planning approval, has contributed to Berkeley feeling restricted and unable to bump up production beyond its business plan levels.

Read more: Homing instincts: Investors can help solve the UK’s low-cost housing crisis