(Bloomberg) -- Berkeley Group Holdings Plc has a warning for the UK government about construction in the country’s housing market.
The homebuilder said the pace of delivery of new homes will slow as a result of a watering down of planning reforms, according to a statement Friday.
The Levelling Up and Regeneration Bill is progressing through Parliament and there have been a number of amendments in recent weeks as Prime Minister Rishi Sunak tries to fend of rebellions among Conservative members of Parliament. He dropped plans this week to impose mandatory housebuilding targets on local councils and Levelling Up Secretary Michael Gove said the government will consult on how housing goals can “better take account of local density.”
“We are concerned that any weakening of the presumption in favour of sustainable development and the status of five year land supply targets will reduce the pace of delivery of new homes,” Berkeley Chief Executive Officer Rob Perrins said in the statement. “This will create uncertainty, less predictability of outcome and less stability, which will lead to lower investment going forward.”
Britain’s housing market is facing severe disruption as it adapts to higher mortgage rates that are threatening to trigger a slump in house prices. Two of the nation’s biggest mortgage lenders, Nationwide Building Society and Halifax, say that house prices fell in each of the past three months with November seeing the biggest decline since the credit crunch of 2008 and 2009.
Despite the uncertainty, Berkeley says it remains on track to deliver full-year pre-tax earnings of £600 million ($736 million) for the year ending April 30.
--With assistance from Jack Sidders.
©2022 Bloomberg L.P.
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