UK’s Berkeley underscores persistent tough sales conditions, Real Estate News, ET RealEstate

March 15, 2024

<p>Representative Image</p>
Representative Image

BENGALURU | LONDON: British high-end homebuilder Berkeley flagged tough conditions in the housing market on Friday, echoing its FTSE 100 peer Persimmon’s concerns expressed earlier this week, as political and economic uncertainties drive homebuyers away.

The UK housing market has seen signs of stability at the start of 2024 on easing mortgage rates after battling subdued demand for most of last year, but the Bank of England delaying interest rate cuts and macro-economic woes have tempered hopes of a better-paced recovery.

Berkeley said sales rates during the four-month period to Feb. 29 remained around a third lower than the comparative period and it reaffirmed its pre-tax profit forecast for the current financial year of 550 million pounds ($700.5 million), about 9% lower than the year-ago period.

Berkeley traditionally has been viewed as being more resilient to challenges in the housing market than some of its sector peers, as many of its developments are targeted at the luxury market and it has a greater exposure to London.

However, in recent times it has more or less chimed in with its rivals.

Persimmon earlier this week warned of subdued market conditions through 2024, after reporting a 52% slump in annual profit.

In contrast, Vistry, was more upbeat about its prospects this year, buoyed by resilient demand for its affordable homes from the private rented sector.

“Berkeley and the other builders are currently in ‘wait and see’ mode. Homebuyers remain cautious and mortgage rates are still prohibitive for many,” Charlie Huggins of finance research firm Wealth Club wrote in a note.

  • Published On Mar 15, 2024 at 05:30 PM IST

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