Member Article

Berkeley fires housing warning after new starts in London plummet by nearly a third

Property developers The Berkeley Group have claimed that the post-Brexit contraction in London’s property market has now ‘stablised’ but fired a warning shot about the current struggle to get new housing developments off the ground.

The Surrey-headquartered property firm announced in their trading update this morning that, despite reservations being down by 16% for August to February, there were signs that the market was now rebounding with pricing remaining ‘resilient’ and enquiry levels ‘robust’.

It also said that reservation levels for January and February of this year were actually outstripping the numbers seen in early 2016.

However, the group has warned that a combination of the demands placed on developers regarding affordable housing, the current planning climate, the Community Infrastructure Levy (CIL) and Section 106 obligations were choking new housing developments in the capital.

The developer, which is currently developing 58 sites across London and the South East, said it was ‘concerned’ after it had experienced a 30% drop in new starts and was currently sitting on a further 22 sites which it was struggling to get off the ground.

In a statement this morning, it said: “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.

“We therefore welcome the Government’s White Paper and the Mayor’s continued focus on housing but note that these will take time to effect change, given the competing priorities.”