(Bloomberg) -- London’s biggest homebuilder Berkeley Group Holdings Plc plans to put the brakes on buying new land as the business pivots to returning capital to shareholders against a backdrop of a cooling housing market.

The company said it “will now only acquire new land very selectively,” after a period of sustained investment in new projects, according to a statement Wednesday. Instead it will prioritize returning cash to investors over and above its existing commitments, it said in the statement.

The UK’s housing market is showing signs of cooling after a period of exceptional price growth driven by the pandemic and accelerated by a sales tax holiday. Soaring inflation and rising interest rates are starting to limit buyers’ ability to service large mortgages, threatening to cool demand.

“It is increasingly difficult to find new land that can accommodate today’s costs of development and generate appropriate returns,” Berkeley Group Chief Executive Officer Rob Perrins said in the statement. “The focus will shift to returning surplus capital, over and above the current annual scheduled payment to shareholders.”

The pivot comes after Berkeley added four major new sites in the year through April, adding 6,000 homes to its pipeline. The decision to slow the rate of new deals echoes the company’s call to halt acquisitions in the run up to the financial crisis, a bet that allowed Berkeley to invest heavily when land prices collapsed. 

Get more on Berkeley’s results:

  • Pre-tax profit of £551.5m, up 6.4% from a year earlier
  • Reservations running slightly ahead of pre-pandemic levels
  • Cost inflation absorbed by sales price rises
  • Revenue of £2.3 billion, beating analysts estimates

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