Berkeley sees 30% drop in London housing starts

Housebuilder Berkeley Group has reported a 30% drop in the number of new starts in London.

In a trading update for the period from 1st November 2016 to 28th February 2017, the group attributed the decline to a combination of the current planning environment and increased demands from affordable housing, the community infrastructure levy and Section 106 obligations.

Underlying reservations also dropped 16% in the seven months following the EU referendum.

Berkeley claimed that reservations had been impacted by Brexit uncertainty and changes to both stamp duty land tax and mortgage interest deductibility.

The group stated: “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.”

Despite these declines, Berkeley stated that enquiry levels remained robust, cancellation rates were at normal levels and pricing continued to be resilient and above business plans.

The update came amid news that mayor of London Sadiq Khan had approved 691 new homes in the capital.

Earlier this month, Transport for London also announced plans to transform a former car park into 350 homes.

Mr Khan recently warned that a hard Brexit could have a crippling effect on London housing, with more than a quarter of the capital’s 350,000 building workforce coming from the EU.

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