Berkeley calls on next government to refinance ‘under-pressure housing associations’ as it moves into build-to-rent

Rob Perrins, chief executive of Berkeley, said: “Recognising the strong occupational and institutional investment demand for high-quality, well-managed rental homes in London and the South East, Berkeley is establishing its own [build-to-rent] platform to maximise returns in today’s market conditions.”

Mr Perrins said Berkeley had identified around 4,000 homes across 17 of its brownfield regeneration sites as an initial portfolio for the platform.

“Developed over the next 10 years, and broadly representing a 10% increase in delivery, the portfolio will be financed by a combination of internally generated funds (over and above annual scheduled shareholder returns), debt secured against rental properties once income-generating, and the introduction of third-party capital at the appropriate time,” he said.

The house builder also reported a slight drop in pre-tax profits of 7.7% compared with the previous year, taking it from £604m to £557.3m.

Its operating margin was broadly the same at 19.5%, compared with 20.3% during the previous period. Berkeley’s net cash increased to £532m, with £1.2bn of borrowing capacity.

Overall, the house builder delivered 3,521 homes, with an additional 406 in joint ventures. This represents a drop compared with last year, when 4,043 homes were delivered, plus 594 in joint ventures.

Mr Perrins said in December last year that the developer was not investing in new projects, amid an “uncertain, unpredictable and burdensome” environment for housebuilding.

He warned that the sector could not continue with the cross-subsidy model “at these levels” without an increase in grant funding from the government.

In February, Berkeley borrowed £125m from Homes England to help deliver 8,000 homes on three brownfield schemes that have faced “economic challenges”.