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UK homebuilder Berkeley Group has called for changes to tax and regulatory policies after reporting a 15% decline in annual pre-tax profit. The company said ongoing economic uncertainty, higher borrowing costs and planning-related challenges are affecting housing delivery, particularly in London, where supply remains significantly below demand. Berkeley maintained its long-term profit outlook despite market pressures and political uncertainty in the UK. The developer also urged policymakers to reduce barriers that delay housing projects and reconsider stamp duty levels to support demand, investment and housing construction across the country.
Berkeley Group has urged the UK government to introduce policy reforms aimed at reducing tax and regulatory pressures on the housing sector after reporting a decline in annual earnings.
The London-focused homebuilder reported a pre-tax profit of GBP 451.4 million (USD 596.16 million) for the 2025-26 financial year, compared with GBP 528.9 million in the previous year, marking a 15% year-on-year decline. The result was slightly below the previous year's figure but broadly in line with market expectations, with analysts tracked by LSEG forecasting a profit of GBP 457.03 million.
The company has been facing a challenging operating environment marked by higher borrowing costs, economic uncertainty and slower market activity. Earlier this year, Berkeley had already cautioned that profit growth could remain subdued through the end of the decade due to broader economic and political factors affecting the housing market.
In its latest update, Chairman Rob Perrins said London continues to face significant structural issues in housing delivery, with the city currently producing less than 10% of the homes required to meet demand. He indicated that stronger political leadership and policy intervention are necessary to support housing development and improve supply.
Perrins stated that the development process needs to become more efficient, with planning, regulatory and approval systems working together to reduce the time required to bring projects into construction. He added that homebuilders must be able to generate returns that adequately reflect the risks involved in development in order to attract long-term investment capital.
The company also highlighted concerns around property transaction taxes. Perrins suggested that current stamp duty levels remain too high and that reducing the tax burden on home purchases could help stimulate demand and encourage greater investment in the housing market.
Berkeley's comments come at a time when the UK housing sector continues to face challenges linked to affordability pressures, elevated financing costs and delays in planning approvals. Industry groups have repeatedly argued that regulatory complexity and slow planning processes are limiting the pace of new housing delivery, particularly in major urban centres such as London.
At the same time, the company acknowledged that recent deterioration in the economic outlook following geopolitical tensions in the Middle East continues to weigh on housing market sentiment and buyer confidence.
Market observers offered a cautious view of Berkeley's policy recommendations. Oli Creasey, an analyst at wealth manager Quilter, noted that the current political uncertainty in the UK may create opportunities for industry participants to influence policy discussions. However, he questioned whether policymakers would be receptive to tax-related recommendations from companies operating within the sector.
Despite these headwinds, Berkeley reaffirmed its expectation of delivering GBP 1.4 billion in cumulative pre-tax profit over the next four financial years. The reaffirmation of guidance was welcomed by investors, with the company's shares rising nearly 5% following the announcement.
The outlook suggests that Berkeley remains confident in its long-term land portfolio and development pipeline, even as the broader housing market continues to navigate economic uncertainty and changing policy conditions.
Source Reuters
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