Homebuilder Berkeley calls for tax and regulatory rethink after 15% profit fall
Berkeley Group urges policy changes amid profit decline
June 24 (Reuters) - British homebuilder Berkeley Group called for government policy changes to reduce tax and regulatory burdens on the sector after it reported a 15% drop in annual profit.
Profit warning and sector challenges
The London-focused developer had warned in April about slowing profit growth to the end of 2030, hit by broad economic and political uncertainty and rising borrowing costs that it said threatened the government's home construction targets.
London’s housing shortfall
The structural challenges have left London delivering less than 10% of the homes it needs, Rob Perrins said in a statement on Wednesday, calling for strong political leadership and policy changes to support growth.
Calls for systemic reform
"Every part of the system needs to work to reduce the time taken to get buildings into development and allow homebuilders to make a return commensurate with the risk that can attract the necessary investment capital," he said.
Political uncertainty and tax policy
With Keir Starmer's resignation announcement on Monday leaving Britain set for its seventh Prime Minister in 10 years, Perrins also said that "excessive" stamp duty on house purchases needs to be cut to stimulate demand and draw in investment.
Economic outlook and market impact
However, deterioration in the economic outlook since the start of the Iran war remains a drag on the housing market.
Industry reactions
"With the current vacuum of leadership in the Government and Labour party, attempts to influence policy may be more able to have an impact than at other times, but we question whether any politician would take tax advice from the companies supposed to be paying it," said Oli Creasey at wealth manager Quilter.
Financial performance and outlook
Shares in the FTSE mid-cap company were up nearly 5% after it reiterated its expectations of £1.4 billion in pretax profit over the next four financial years despite the uncertain economic and political backdrop.
Berkeley's 2025/26 pretax profit fell to £451.4 million ($596.16 million) from £528.9 million the previous year. Analysts had expected profit of £457.03 million, according to data compiled by LSEG.
($1 = 0.7572 pounds)
(Reporting by Simone Lobo and Raechel Thankam Job in BengaluruEditing by Rashmi Aich and David Goodman)
