Berkeley profits surge ahead

Housebuilder Berkeley added to cheer in the property sector as it said profits soared by nearly a fifth and revealed it was delivering more homes than before the financial crisis.

Berkeley profits amid a buoyant housing market.

It said demand in London and the South East remained strong, with the market as a whole benefiting from the Government's Help to Buy scheme.

But chairman Tony Pidgley sounded a warning on the impact of property tax changes on the ability of the UK to meet its housing supply shortage, after Chancellor George Osborne announced that foreign owners would have to pay capital gains tax.

The FTSE 250-listed group said pre-tax profits for the six months to the end of October rose 19.2% to £169.5 million, while full-year earnings were likely to be towards the top end of expectations.

It sold 2,294 new homes during the period, up from 1,927 the year before, helping lift revenues by 19.7% to £821 million.

Shares in the firm leapt more than 7% higher in a buoyant session for the sector, with Halifax reporting house prices up 7.7% year-on-year in November, and a day after the Chancellor announced new loans worth £1 billion to unblock housing developments.

But Mr Pidgley warned the UK faced a long-term challenge in dealing with a "significant housing shortfall which continues to grow".

Berkeley said it was now delivering more homes than immediately prior to the financial crisis in 2008 and was building on every one of its sites which has viable planning consent and vacant possession, he said.

He added: "Berkeley has the capacity to invest further, which would create more homes and jobs, but is concerned by the increased uncertainty created by the ongoing debates surrounding the future of property taxation and international buyers."

Meanwhile, the group said its Tower, One St George Wharf development in Vauxhall, south London - which hit the headlines after a helicopter crash in January - was now on track to deliver most of its completions in the second half of the financial year.