Berkeley chief executive Rob Perrins today denounced “the ever-changing and increasingly cumbersome regulatory environment”.
He said: ‘While this is well intentioned, it limits investment in brownfield regeneration and home building.’
The latest quarterly data from the Department for Leveling Up, Housing & Communities (DLUHC) shows new housing starts in London in 2022 of just over 20,000 units, broadly in line with the long-term average of the past 10 years. The current London Plan target is 52,000 new homes per year and the local housing need identified by the government is 94,000 per year.
Housing production in London and the South East will only decline in coming years, Rob Perrins has warned.
He said: “Beyond the short term, the current operating environment, characterized by record levels of planning pricing in an increasingly complex, uncertain and slow planning system, in an era of construction costs high taxes, increased regulation and higher corporate taxes, alongside the Residential Property Developers Tax and the new proposed Building Safety Tax will inevitably continue to lead to a reduction in the supply of new homes to London and the South East.
He said: “We are concerned that the changes proposed in December to the NPPF (National Planning Policy Framework) will weaken the presumption in favor of sustainable development and that the status of five-year land supply targets will significantly reduce the pace delivery of new homes. Unfortunately, this has already materialized with 55 local authorities suspending or abandoning their local plan development process due to uncertainty within the planning process.
“While the government’s ‘brownfields first’ strategy is undoubtedly the right way to deliver the homes the country needs most where they are needed most, the planning system has yet to recognized the challenges of this most sustainable form of home construction and ignores today’s ever-changing regulatory environment.
“The challenge is heightened when coupled with the uncertainty of an ever-changing and increasingly cumbersome regulatory environment. While well-intentioned, it limits investment in brownfield regeneration and construction of If housing delivery is to be sustained, the planning system must respond to these challenges and certainty is needed in the regulatory environment as an immediate priority.
Despite all this, Berkeley Group Holdings reported pre-tax profit up nearly 10% to £604.0 million (2022: £551.5 million) for the year ended 30e April 2023 with revenue of £2,550m (2022: £2,348m).
Berkeley completed 4,043 homes during the year, plus 594 in joint ventures (2022: 3,760, plus 872) – 86% of them on reclaimed brownfields.
“This is a very strong performance from our sales and construction teams, given market conditions and changing building regulations, and reflects the resilience of Berkeley’s business model, which is focuses on the most undersupplied markets in the country,” Perrins said.
Despite all this, Berkeley still expects to make pre-tax profits of at least £1.05 billion over its next two financial years.
“We continue to see good levels of demand for well-located homes built to high standards of design and quality, but recognize that the market is likely to lack urgency until there is more certainty on the interest rate trajectory.
“Looking forward, we are well positioned to meet our guidance for the next two years and continue to invest in our existing regeneration sites, but we will remain cautious in committing to new investments until growing conditions improve. be in place.”
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