Berkeley blames affordable housing requirements for starts drop

In a trading update for the period from 1 November 2016 to 28 February issued today, the house builder said “increased demands from the combination of affordable housing, Community Infrastructure Levy, Section 106 obligations and review mechanisms” had partly caused the fall.

It also pointed to planning issues, the Community Infrastructure Levy and Brexit uncertainty.

The company said: “Berkeley is concerned by this under-supply and the knock-on effect it has on the provision of housing of all tenures which, if not addressed, represents a threat to London remaining the inclusive and open global city which is so important to London and the UK’s growth and prosperity.

“We therefore welcome the government’s White Paper and the mayor’s continued focus on housing but note that these will take time to effect change, given the competing priorities.”

It added that it has 22 sites where schemes are going through the planning process or where building cannot start due to “pre-commencement conditions to be cleared or other enabling issues”.

Tony Pidgley, chair of Berkeley Group, has previously said he saw “nothing wrong” with Sadiq Khan’s 35% affordable housing threshold for private developers.

Berkeley also revealed it expects profits to hit the top end of analysts’ forecasts for the financial year, and said the housing market in London and the South East had “stabilised”.

It said reservations in the seven months following the Brexit vote dropped 16% on the previous year, though the last two months saw a rise in reservations compared to the same period in 2016.