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Berkeley blames Brexit 'uncertainty' as London starts fall 30%

Housebuilder Berkeley Group has revealed that its London housing starts have plummeted by nearly a third, with uncertainty following the Brexit vote partly to blame. 

In a trading update today, the Surrey-based developer said new residential projects in the capital in the four months to the end of February had declined by “some 30 per cent”.

As well as flagging the impact of the decision to leave the EU, Berkeley cited “the planning environment” and factors such as the Community Infrastructure Levy and section 106 demands.

“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,” the firm added. 

Last September the group warned that the government’s housing policies would lead to London missing its target for new homes. 

Berkeley today said it welcomed the government’s housing white paper and London mayor Sadiq Khan’s continued focus on the sector.

However, it warned such policies would take time to “effect change”.

The firm said it was in production on 58 sites across London and the South-east, with 22 other sites in the pipeline.

Berkeley said the housing market in the South-east has “stabilised”, despite seeing a 16 per cent year-on-year drop in reservations since the EU vote. 

Sales in the last two months were ahead of the same period last year.

The group said it expected full-year pre-tax profits to come in “at the top end of analysts’ expectations”.

It also said remained on track to generate £3bn of pre-tax profit in the five years to April 2021.

Shares in Berkeley were this morning trading up 5.8 per cent from last night. 

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