Berkeley sees strong demand in London and Southeast

Published:  28 June, 2011

LONDON: Berkeley Group has reported continuing strong demand in London and the South East of England.

The homebuilder said the upturn had helped raise its profits before tax for the year to April by 23.5% to £136m.

The firm also said that the South East "continues to be characterised by a shortage of supply" and in the best locations "mortgage availability has not been a significant constraint to demand as approximately 50% of Berkeley customers to not require a mortgage".

Berkeley said it had acquired 3,600 plots across 2,400 locations over the last year, predominantly around the capital, increasing the value of its land bank by 13%.

"There are still two markets in the UK," said Steve McGuckin of construction consultants Turner & Townsend. "In London, demand remains strong, buoyed by its more robust economy and overseas investors due to the weak pound.

"Outside London, where demand is far weaker and prices remain under real pressure, there are still major question marks over new build projects, especially if they are being undertaken by smaller developers.

The homebuilder also reported that building costs had remained stable during the year, in contrast to UK manufacturers, who have been seeing steadily rising materials costs.

There was a warning about affordable housing: "There are now considerably less public funds available to contribute to the financing of affordable housing, and this... will threaten the commercial viability of some schemes."

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