The company said the value of its private sales reservations were subdued in the roughly two months before the budget due to speculation around higher taxation. — Bloomberg
LONDON: Berkeley Group Holdings Plc said its UK home sales declined in the months leading into the budget and warned it has yet to see the fruits of a promised push to ease regulations to support more development.
The company said the value of its private sales reservations were subdued in the roughly two months before the budget due to speculation around higher taxation, according to a statement yesterday.
Chancellor of the Exchequer Rachel Reeves last month unveiled a tax on homes valued at more than £2mil, with a surcharge starting at £2,500 a year and rising to as much as £7,500.
“Since 2014 successive governments have seen property ownership as a source of increased revenue,” chief executive officer Rob Perrins said in the statement.
“Coupled with higher corporate and development taxes, this has constrained investment in the delivery of new homes.”
The frequent tax changes and growing planning and regulatory hurdles have weighed on the pace of development.
These headwinds have disproportionately impacted activity in London – the main market Berkeley operates in.
The new mansion tax targets less than 1% of all properties in England.
However, most homes worth more than £2mil are in London, where property agents are warning the tax could amplify turbulence in the city’s housing market.
UK homes worth more than £2mil could drop about 5% in value next year as the market adjusts to the change, Hamptons has forecast.
The broker said it expected London to be the only region in Britain to see house prices fall this year and is set to significantly trail the rest of the country for at least the next two years.
Developers have also bemoaned the pace at which homes are being signed off by the UK’s Building Safety Regulator.
The government unveiled a series of changes at the regulator this summer and while this had resulted in renewed impetus, the country’s regulatory burden is not reducing, Berkeley said in the statement.
Still, the developer struck a more upbeat tone about the long-term outlook for London. It noted a gradual improvement in affordability with falling interest rates, improved mortgage availability and stronger wage growth, as well as a package of measures aimed to accelerate projects in the UK capital.
However, the cash due on its forward sales was £266mil lower on Oct 31 than it was in April 2025.
Berkeley said the value of its sales reservations in the six months through October was 4% lower year-on-year and down 30% over the past two years.
“Interest rates are taking too long to adjust to economic reality, and this risks hampering the pace with which growth returns to the housing market,” the company said in the statement.
Still, “these headwinds will recede and the feel-good factor will return,” it added. — Bloomberg
