Homebuilder Berkeley calls for tax and regulatory rethink after 15% profit fall (updated)

Berkeley group

Today 07:22

Recasts and writes through, adding executive and analyst comment
Chairman says London is delivering less than 10% of required homes
Company reiterates targets despite economic uncertainty
Shares up 5% 

    June 24 (Reuters) - British homebuilder Berkeley Group BKGH.L called for government policy changes to reduce tax and regulatory burdens on the sector after it reported a 15% drop in annual profit.
The London-focused developer had warned in April about slowing profit growth to the end of 2030, hit by broad economic and political uncertainty and rising borrowing costs that it said threatened the government's home construction targets.
The structural challenges have left London delivering less than 10% of the homes it needs, Rob Perrins said in a statement on Wednesday, calling for strong political leadership and policy changes to support growth.
"Every part of the system needs to work to reduce the time taken to get buildings into development and allow homebuilders to make a return commensurate with the risk that can attract the necessary investment capital," he said.
With Keir Starmer's resignation announcement on Monday leaving Britain set for its seventh Prime Minister in 10 years, Perrins also said that "excessive" stamp duty on house purchases needs to be cut to stimulate demand and draw in investment.
However, deterioration in the economic outlook since the start of the Iran war remains a drag on the housing market.
"With the current vacuum of leadership in the Government and Labour party, attempts to influence policy may be more able to have an impact than at other times, but we question whether any politician would take tax advice from the companies supposed to be paying it," said Oli Creasey at wealth manager Quilter.
Shares in the FTSE mid-cap .FTMC company were up nearly 5% after it reiterated its expectations of £1.4 billion in pretax profit over the next four financial years despite the uncertain economic and political backdrop.
Berkeley's 2025/26 pretax profit fell to £451.4 million ($596.16 million) from £528.9 million the previous year. Analysts had expected profit of £457.03 million, according to data compiled by LSEG.
     
($1 = 0.7572 pounds)

(Reporting by Simone Lobo and Raechel Thankam Job in Bengaluru
Editing by Rashmi Aich and David Goodman)
((Simone.Lobo@thomsonreuters.com, +919920570373))