This post was originally published on this site
Investing.com — Berkeley Group Holdings PLC (LON:BKGH) said it is taking a “cautious approach” to releasing new homes, as it warned of persistent volatility in the U.K. real estate market.
In a trading update, the British housebuilder added that it will instead focus on forward sales while also reining in costs and maintaining operating margins.
Build cost inflation, a key source of pressure on the Cobham-based group’s performance, has showed “early signs of moderating” as well, it noted.
Meanwhile, sales since the end of September have been around 25% lower than the “strong” first five months of the current fiscal year, Berkeley said.
But Berkeley still reaffirmed its guidance for annual pre-tax earnings of about £600 million (£1=$1.197) for the year ending on April 30, along with at least £1.05B in aggregate over the following two years, citing benefits from firm pricing and current transaction levels.
Recent demand for housing in the U.K. has been hit by a spike in interest rates, which have partly contributed to higher expenses for homebuyers.
Shares in Berkeley Group were slightly lower on Friday.
