UK housebuilder Berkeley’s annual profit jumps

June 21 (Reuters) – Berkeley Group Holdings (BKGH.L) on Wednesday posted a near-10% jump in annual profit even as the British high-end homebuilder warned of demand concerns and tough market conditions due to elevated levels of interest rates.

Berkeleys’ update comes at a time strengthening prospects of further Bank of England interest rate hikes have stymied hopes of a strong recovery in the UK housing sector as lenders withdraw or reprice mortgage offerings.

Credit ratings agency Moody’s warned earlier this month that British house prices are likely to fall 10% over the next two years, while the country’s lenders approved fewer home loans in April than the month before, cutting short signs of housing market recovery seen in early 2023.

CEO Robert Perrins said business continued to see good levels of enquiries, but flagged concerns about the trajectory of interest rate rises.

Berkeley, which focuses on redeveloping land previously used for industrial purposes unlike its bigger rivals, further said it will remain cautious about new investment and sales launches due to volatility in the macro-economic, political and regulatory environment.

Operating across London, Birmingham and the South of England, Berkeley reported a pre-tax profit for the year ended April 30 of 604 million pounds ($772.5 million), compared with 551.5 million pounds reported a year earlier. The homebuilder had forecast a pre-tax profit of about 600 million pounds.

($1 = 0.7819 pounds)

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