Housebuilder Berkeley Group Plc reported a slump in annual pretax profit on Wednesday, as Britain’s housing sector remains under pressure from uncertainty ahead of the country’s exit from the European Union and builders face higher costs.
Berkeley reiterated that pretax profit for 2019-20 is expected to fall by around a third from 2018-19.
The housing market has weakened since the June 2016 Brexit vote, leading to a drop in prices in London. At the time of the referendum, prices were rising by about 5 percent a year. Builders are also dealing with the rising cost of materials.
Berkeley in December said that its short-term outlook was uncertain because of Brexit and a number of other unspecified headwinds in its London and the South East markets.
“The operating environment has been uncertain for three years, since the United Kingdom chose to leave the European Union, resulting in a lack of visibility in the political outlook,” Berkeley said in a statement.
“The increasing property tax burden since 2014, and a complicated, costly and bureaucratic planning system, it is unsurprising that both demand and supply are constrained at present,” the builder added.
The company delivered 3,698 homes during the annual period, up from 3,678 in the previous year, while average selling prices increased 3.2% to 748,000 pounds.
The company, which operates primarily in London, Birmingham and the South of England, said pretax profit fell 20.7% to 775.2 million pounds in the year ended April 30, but was higher than analysts’ expectations of 730 million pounds, according to company compiled consensus estimates.