Berkeley reveals summer land-acquisition drought


Berkeley Group did not purchase a single plot of land this summer, it has revealed.

The housebuilder, which expects to make more than £1bn over this financial year and next, said on Friday morning (8 September) that it would only invest “very selectively” in future.

Berkeley warned in June that delivery of new homes would be “jeopardised” by the planning environment and regulatory uncertainty “unless urgently resolved”.

Now it has revealed that it did not buy any land in the period covered by its latest trading update, from 1 May to the end of August.

“The complexity and protracted nature of the current planning system and lack of clarity surrounding certain regulatory changes affecting our sector, at a time of considerable uncertainty for the UK economy with persistent high inflation and interest rates, continues to deter investment into brownfield regeneration and the wider housebuilding sector,” said the firm this morning.

“Consequently, Berkeley has not acquired any land in the period and will only invest very selectively in new opportunities.”

The housebuilder said it expected to deliver £1.05bn in pre-tax profit across 2022-23 and 2023-24, with the balance “likely to be weighted slightly” toward the latter year.

“Supported by a strong opening forward-sales position, we have over 90 per cent of FY24 [full-year 2024] revenue exchanged, and anticipate cash due on forward sales to be around £2bn at 31 October 2023,” it added.

“We remain on track to be working-capital neutral over the course of this and the next financial year.”

Berkeley said enquiries had stayed at similar levels over the past four months, but that its value of underlying private sales reservations was 35 per cent below last year’s rate.

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