Berkeley signals surprisingly strong profits in ‘stabilising’ London property market

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The housebuilder Berkeley Group expects profits for the year to April to come in “at the top end of analysts’ expectations” despite a slowing housing market in London, the market in which it specialises.

The group said on Friday that “the housing market in London and the southeast has now stabilised”, and that despite slower sales overall since the vote to leave the EU, January and February saw sales ahead of those in 2016.

For the seven months since the vote, reservations are down 16 per cent, it said in a trading statement. However, Berkeley said it remained on track to generate £3bn of pre-tax profit in the five years to April 2021.

The group, known for its high-end London homes, is closely watched for signs of the health of that market and recently set up a new office in Birmingham, its first outside London and the southeast in more than a decade. This follows two years of declining appetite for new-build homes in central London, and a broader slowdown since the Brexit vote.

However, Berkeley said: “Enquiry levels remain robust, cancellation rates are at normal levels and pricing continues to be resilient and above business plan levels.” Its forward order book will stand above £2.6bn by April 30, the end of its financial year, Berkeley expects.

Analysts on average expect pre-tax profits of £750m for the year to April 2017.

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