The shares of fellow housebuilders, Persimmon, Barratt Developments and Taylor Wimpey were also up Tuesday morning, while the FTSE 100 index itself dipped by 0.28%.
In a trading update covering the period from 1 May to 31 August, Berkeley reiterated it is on track to deliver £2bn in pre-tax profit by 30 April 2018. The UK housebuilder came into the financial year with a record £3.25bn cash due on forward sales and an estimated land bank gross margin of £6.15bn.
The group also said it is not wavering from its commitment to continue investing in future developments and land acquisitions.
Despite experiencing a hiatus directly before and after the EU referendum, the group confirmed that the market in August has rebounded to the relative levels seen over the first five months of the year, albeit down 20% from August 2015.
“Importantly, throughout 2016, site visitor numbers and enquiries have been at similar levels to the same period last year demonstrating the strength of underlying demand, although customers are taking longer to commit,” the company said in a statement. “Pricing has remained resilient and above business plan levels with reservation cancellation rates at normal levels, following a temporary and expected increase after the UK referendum result,”
However, Berkeley could not resist an opportunity to lambast the current government housing policy, which it says “has been helpful outside London” but “has had a negative effect on the capital.”
In particular, Berkeley stressed that the tension between the national Starter Homes policy and London mayor Sadiq Khan’s affordable housing ambitions coupled with higher transaction taxes and the high rates of the Community Infrastructure Levy “now pose a significant threat to development viability.”
“While these challenges persist, and the barriers to entry for small builders remain high, London will fall well short of its targets for new homes,” the firm warned. “This is not just a problem for business and ordinary people in the capital but for the country as a whole. London is the engine of our national economy and the principal driver of fiscal revenues. So this is not just a question of housing Londoners - important though that is. It poses a risk to deficit reduction and the prosperity of the whole country.”