Berkeley says London housing market ticking up again but costs a concern

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() Holdings PLC said London’s housing market is beginning to tick up again though cost pressures are building.

London has lagged the housing boom enjoyed by other parts of the country during the past twelve months, but Berkeley said with the easing of lockdown restrictions the capital’s market had started to firm again.

Pricing generally has better than expected, it added, which is offsetting building materials cost inflation arising principally from supply chain issues and staffing problems resulting from Brexit and the Coronavirus (COVID-9) pandemic.

In the trading statement ahead of its AGM, the builder added it is on track to meet profit guidance and post an annual pre-tax profit this year at or above the £518mln reported for year to 30 April 2021. 

This will be weighted more towards the first half with forward sales of £1.7bn forecast for the end of the current six months, unchanged from April.

Berkeley has net cash of £1.1bn and indicated it will complete the previously announced proposed B-share capital return of £451mln later this month.

This comprises both the return of the first half of the previously identified surplus capital (£228mln) and the remaining £223mln of the regular shareholder return for the year to 31 March 2022. 

The proposed B-share capital return will be accompanied by a share consolidation, following which the regular, annual £281mln shareholder returns will represent approximately £2.50 per share.

Following the B-share payment, the next scheduled shareholder return is the £141mln in respect of the six months to 30 September 2022 which might be paid in dividends or through a share buy-back said the statement.

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