Newswatch - Berkeley Group builds up
The booming housing market means good times ahead for property companies such as Berkeley Group, which is expected to report pre-tax profits of around £106m for the year to 30 April 1999.
Only last summer the company, which concentrates on the residential sector, was complaining of a slowdown in the housing market and had taken steps to reduce its land-acquisition programme.
But these fears appear to have been unfounded and the measures taken unnecessary. A senior figure at the company said: ‘The New Year has been quite a buoyant time. This is always a reassuring way to start off the new calendar year.’
Not that it has all been plain sailing. Berkeley is a leading player in the executive housing market which was hit hard in the Budget. The imposition of higher stamp duty rates on properties over £250,000, added at least another £1,250 to buyers’ costs.
But the company admits this does not appear to have dampened the enthusiasm of its buyers, who were this week offered the chance to buy central London properties at a new Berkeley development, Benbow House, next to the Globe Theatre on the south bank of the Thames.
Demand for residential property continues to outstrip supply. With low interest rates, high consumer confidence and a low average property-price-to-salary ratio, the company appears confident that the remainder of the year will be as good as the beginning.
‘The economic backdrop is very favourable,’ said the senior figure. The profit before tax figure for last year was £100.3m.