British homebuilder Berkeley to halt land buying and slow building (updated)

Berkeley groupHoldings

01/04/2026 07:23

Berkeley cuts land buying, slows construction investments

Berkeley targets operating margins of 17.5% to 19.5% through 2030

Expects over 1.4 billion pounds in pre-tax profit over the four years from fiscal 2027 to 2030

Shares drop as much as 19%

Adds details on tax, regulation in paragraphs 6 and 7, fresh analyst comment in 9, adds graphic

By Raechel Thankam Job

April 1 (Reuters) - British homebuilder Berkeley BKGH.L warned of a slowdown in profit growth through 2030 and said it would halt land purchases as the Middle East conflict and likely higher borrowing costs dampen hopes of a housing market recovery, sending its shares down nearly 19% on Wednesday.

As the company slows construction investment to match weaker sales, it now expects to earn more than 1.4 billion pounds ($1.9 billion) pre‑tax over the four years from fiscal 2027 to 2030, implying an average of 350 million pounds a year.

The high-end homebuilder is expecting a pre-tax profit of 450 million pounds for fiscal year 2026.

The update comes as missile strikes by Iran, the U.S. and Israel in the Middle East push up building costs and risk keeping interest rates higher for longer, threatening the fragile demand recovery and prompting margin warnings from rivals such as Taylor Wimpey TW.L and Bellway BWY.L.

TAXES AND REGULATIONS WEIGH

London-focused Berkeley said it can no longer achieve its required rate of return on new land purchases due to increasing tax and regulatory burdens on residential development.

"Where residential transactions have been taking place, land prices have been overheated," the company said, adding it will for now only buy new land through joint ventures.

Builders have warned that developer taxes, safety levies and planning delays are limiting housing output.

EARLY RECOVERY HOPES FADE

Berkeley had begun to see signs of recovery in early 2026, but earlier concerns that the Middle East conflict would hurt demand and affordability has "now become a reality", it said.

        "Its currently strong land bank allows them to flex the delivery in the near term and allows them to react and deliver growth if the market and operational backdrop improves beyond FY26," Investec analyst Aynsley Lammin said.

Berkeley's shares fell to their lowest since December 2016 after Wednesday's update.

($1 = 0.7528 pounds)

Berkeley's shares lose ground https://www.reuters.com/graphics/BERKELEY-HOT/zgvolawqgpd/chart.png

 (Reporting by Raechel Thankam Job in Bengaluru; Editing by Mrigank Dhaniwala, Subhranshu Sahu, Emelia Sithole-Matarise and Arun Koyyur)

 ((RaechelThankam.Job@thomsonreuters.com;))