Regulation has ‘stifled’ growth in housebuilding, Berkeley boss says
The boss of FTSE 100 listed housebuilder Berkeley Group welcomed the growing political consensus around housebuilding, but warned recent regulatory changes had stifled growth.
“We are heartened by the strong political consensus behind increasing the delivery of new homes across the country and the recognition that regenerating brownfield land is the most sustainable and popular way to deliver this vital goal,” Rob Perrins, chief executive of Berkeley Group said in a statement.
However, he suggested that politicians needed to relax some rules to ensure that developers could deliver as many homes as possible.
“The industry has absorbed many regulatory changes over recent years and, while all well-intended, when taken together they have stifled investment, housing delivery and growth,” he said.
Planning policy and public funding need to prioritise affordable homes over the other “significant financial demands” placed upon the industry, he said.
Perrins said he was “supportive” of initiatives to reduce stamp duty and provide greater access to higher loan-to-value mortgages.
The comments reflect the ambitious housebuilding targets announced by both major parties, which will require the next parliament to build 300,000 houses per year over the next parliament.
To help meet those targets, the firm suggested that there should be greater resources for “severely overstretched local authorities” and stronger support for well-designed high density neighbourhoods.
It also suggested the government should refrain from a further round of major reforms in favour of addressing “a number of relatively small operational challenges”.
Perrins’ comments came alongside Berkeley’s 2024 financial results. Pretax profit slipped just under eight per cent to £557.3m, down from £604m last year but in line with company guidance.
Analysts at Peel Hunt said the results were “slightly better than expected”.
Berkeley reported that its operating margin narrowed slightly to 19.5 per cent from 20.3 per cent previously. However, sales pricing remained “firm” while build cost inflation was at “negligible levels”.
Net reservations were around a third lower than a year ago due to economic volatility, but Perrins thought that lower interest rates could help fuel a more active market.
“The current lack of urgency in the market is likely to remain until the long-anticipated reduction in interest rates commences,” he said.
It expects to notch a pretax profit of £525m in booth the 2025 and 2026 financial year.
The firm also announced plans to establish a Build to Rent platform with around 4,000 homes included in the initial portfolio.