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British housebuilder Berkeley Group has called on the UK government to reduce tax and regulatory burdens on the housing sector after reporting a 15% fall in annual pre-tax profit. The developer said policy reforms, including lower stamp duty and faster planning approvals, were needed to encourage investment and accelerate housing delivery, particularly in London. While the company reiterated its profit guidance for the next four financial years, it cautioned that economic uncertainty, rising borrowing costs and political developments continued to weigh on the housing market. The appeal comes as the UK government pursues ambitious housebuilding targets amid persistent supply shortages and weakening market conditions.
British housebuilder Berkeley Group has urged the UK government to introduce tax and regulatory reforms to stimulate residential development after reporting a 15% decline in annual pre-tax profit. The company made the appeal alongside its financial results released in the past week, maintaining that lower taxes, planning reforms and reduced regulatory hurdles were necessary to attract investment and increase housing supply, particularly in London.
The London-focused developer reported pre-tax profit of GBP 451.4 million (USD 596.16 million) for the 2025-26 financial year, compared with GBP 528.9 million a year earlier. The result was below the previous year's earnings but broadly in line with market expectations, with analysts surveyed by LSEG forecasting pre-tax profit of GBP 457.03 million.
Berkeley had already warned in April that profit growth would remain subdued until the end of 2030, citing broader economic and political uncertainty as well as elevated borrowing costs. According to the company, these challenges continue to pose risks to the UK government's housing delivery ambitions.
Chief Executive Rob Perrins said structural issues had left London delivering fewer than 10% of the homes it requires. He argued that policy intervention was necessary to shorten the time required to move developments from planning to construction and to ensure homebuilders achieved returns that justified the risks involved in residential development.
Perrins also called for a reduction in what he described as excessive stamp duty on residential purchases, stating that lower transaction taxes would help stimulate buyer demand and attract additional investment into the housing sector.
The company acknowledged that the economic outlook had deteriorated further following the onset of the Iran conflict, adding to existing pressures on the residential market. Market participants also highlighted political uncertainty following Prime Minister Keir Starmer's recent leadership challenges, with analysts suggesting that this could make policy changes more difficult despite growing calls from the housing industry.
Oli Creasey, an analyst at wealth manager Quilter, said that while the current political environment could provide greater opportunities for businesses to influence policy than under more stable conditions, it remained uncertain whether politicians would adopt proposals advocating tax reductions from companies that would benefit directly from them.
Despite the weaker earnings, Berkeley reaffirmed its guidance of GBP 1.4 billion in cumulative pre-tax profit over the next four financial years. Investors responded positively to the outlook, with shares in the FTSE mid-cap company rising nearly 3% after the announcement.
The results underscore the continued pressures facing UK residential developers as higher financing costs, planning constraints and subdued market confidence weigh on housing delivery, even as the government seeks to increase new home construction across the country.
Source - Reuters
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