Berkeley Group results to signal London housing market stabilisation
Housebuilder Berkeley Group expects full year profits to come in at the top end of expectations after signalling that the London housing market has stabilised following a Brexit shock.
The company, which is focused on London and the South East, said that while reservations in the seven months since the referendum are down 16%, January and February were ahead of last year.
In a trading update, the group said: "The housing market in London and the South East has now stabilised.
"Inquiry levels remain robust, cancellation rates are at normal levels and pricing continues to be resilient and above business plan levels."
Berkeley added that it is in a "strong position" and remains on track to deliver at least £3 billion of pre-tax profit over the five years to April 2021.
Forward sales are expected to be "in excess" of £2.6 billion by April.
It said the 16% slump in reservations was also down to a Government crackdown on buy-to-let investors, but a number of other factors have offset the hit.
Berkeley said: "The reduction in reservations is across all price points and reflects the ongoing impact of both Brexit uncertainty and the changes in recent years to stamp duty land tax and mortgage interest deductibility.
"This has been partly offset by the continued availability of mortgage finance at low interest rates, favourable currency exchange rates and the quality of Berkeley's well-presented and well-located homes."