UK homebuilder Berkeley underscores persistent tough sales conditions
Reuters
Published Mar 15, 2024 07:53
(Reuters) - British high-end homebuilder Berkeley flagged tough conditions in the housing market on Friday, echoing its FTSE 100 peer Persimmon (LON:PSN)'s concerns expressed earlier this week, as political and economic uncertainties drive homebuyers away.
The UK housing market has seen signs of stability at the start of 2024 on easing mortgage rates after battling subdued demand for most of last year, but the Bank of England delaying interest rate cuts and macro-economic woes have tempered hopes of a better-paced recovery.
Berkeley said sales rates during the four-month period to Feb. 29 remained around a third lower than the comparative period and it reaffirmed its pre-tax profit forecast for the current financial year of 550 million pounds ($700.5 million), about 9% lower than the year-ago period.
Berkeley traditionally has been viewed as being more resilient to challenges in the housing market than some of its sector peers, as many of its developments are targeted at the luxury market and it has a greater exposure to London. However, in recent times it has more or less chimed in with its rivals.
Persimmon earlier this week warned of subdued market conditions through 2024, after reporting a 52% slump in annual profit.
In contrast, Vistry, was more upbeat about its prospects this year, buoyed by resilient demand for its affordable homes from the private rented sector. "Berkeley and the other builders are currently in 'wait and see' mode. Homebuyers remain cautious and mortgage rates are still prohibitive for many," Charlie Huggins of finance research firm Wealth Club wrote in a note.
($1 = 0.7851 pounds)
Get The App
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.