Business

Housebuilder Berkeley profits up 40%

House under construction Image copyright PA
Image caption Berkeley Group said it remained alert to the cyclical nature of the property market

Housebuilder Berkeley Group has reported a 40% jump in annual profits following what it called a surge in economic confidence in the last year.

It said pre-tax profits for the year to 30 April were £380m, compared with £270.7m a year earlier.

The group completed 3,742 new homes in the year, 30% more than at the peak of the housing market in 2007.

It added there was capacity to increase house building with the continued support of the Help to Buy scheme.

The group also revealed it had invested £353m in nine new construction sites in the last year, which should see it build a further 2,500 new homes.

Berkeley Group chairman Tony Pidgley said he was confident the company had the right plan to deliver long-term sustainable success,

But he added the group remained "alert to the inherently cyclical nature of the property market and the uncertainty surrounding future tax policy and political decision-making".

"Monetary policy and the financial stability of banks, which is currently a concern of regulators, were both factors influencing the housing market in the long-term, Mr Pidgley added.

"Provided any future increases in interest rates or regulation of mortgages are matched with future wages growth as the economy expands, the prospects for the housing market remain positive."

His comments come days after Bank of England governor Mark Carney hinted during his annual Mansion House speech that interest rates could rise earlier than expected.

Chancellor George Osborne also announced that the government would give the Bank new powers to restrict mortgage lending to prevent the property market overheating.

On Tuesday, official figures showed house prices rose 9.9% to £260,000 in the year to April, marking the biggest rise in property values in four years.

Berkeley Group shares were 2.65% lower at 2201p in mid-morning trade on the London Stock Exchange.

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