Berkeley Group Reaffirms Guidance, Concerned by Impact of Regulatory Changes

Berkeley Group (LON: BKG) reaffirmed its earnings guidance for £975 million in pre-tax profit across FY25 (£525 million) and FY26 (£450 million), but expressed concerns over the impact of regulatory changes on housing delivery.

In its latest trading update, the housebuilder reported a continued improvement in sales reservations, though it said a full recovery to pre-pandemic levels would require greater confidence in interest rate reductions and economic stability.

While welcoming government planning reforms, Berkeley highlighted challenges posed by recent regulatory changes, including the upcoming Building Safety Levy and the Gateway 2 approval process for building safety cases. 

“Berkeley remains concerned by the impact of the extent and pace of regulatory changes of recent years, as we now await details of the new Building Safety Levy,” wrote the firm.  

“Taken together, these incremental changes place significant pressure on the delivery of new homes.”

BKG called for a review to prevent further delays to housing delivery, aligning with concerns raised by the G15 group of Housing Associations.

Financially, Berkeley said it remains strong, with net cash expected to be around £300 million by 30 April 2025. 

This is said to reflect increased shareholder returns, including £71.3 million in share buybacks since its interim results and a £33 million interim dividend due on 28 March.

Furthermore, the company said it has also made progress on 10 long-term regeneration sites, securing amendments and working to finalise Section 106 agreements. 

Additionally, it continues to assess new land opportunities.