Berkeley Group Holdings (LSE:BKG) announced on Wednesday that it will suspend new land purchases and extend the timeline of its medium-term strategy through April 2030, pointing to geopolitical tensions, a weakening economic backdrop and regulatory delays that have lengthened construction schedules by roughly a year.
The FTSE-listed housebuilder said it is now targeting pre-tax profit of more than £1.4 billion over the four years to April 2030, with earnings expected to be more heavily weighted toward the latter part of the period. Previously, Berkeley had projected pre-tax profit of about £450 million for FY26 and a similar figure for FY27.
The company said it will not acquire additional land while current market conditions persist. Berkeley highlighted rising taxes on residential development—costs not applied to other land uses—as a key factor keeping land prices elevated despite a drop in residential transactions. Instead, the group plans to focus entirely on its existing development pipeline of more than 10,000 homes across London and the South East.
Berkeley also pointed to regulatory hurdles, noting that the Building Safety Regulator’s gateway process has extended the period between planning approval and the start of construction by approximately 12 months. The company added that new housing starts in London currently stand at less than 10% of the target set by the Ministry of Housing, Communities and Local Government.
While Berkeley said it observed early signs of a modest recovery during the first two months of 2026, it warned that “recent geopolitical events and the macroeconomic consequences, including reduced potential for further rate cuts, could reduce confidence in a near-term market recovery,” a risk it said had “become a reality.”
Financially, the group has reduced land creditors from £900 million to about £470 million and lowered operating costs by roughly 25% in real terms. It continues to aim for an operating margin within its historical range of 17% to 21% and a return on capital employed above 15% by FY30, with returns expected to fall between 11% and 15% during the intervening years. Berkeley also confirmed it will maintain a net cash position.
The company has returned £336 million so far under its £2 billion shareholder return programme, including £260 million up to September 2025 and a further £76 million since then. Berkeley remains on track to complete the programme by September 2030 and said it prefers share buybacks while the share price trades below net asset value per share.
Meanwhile, the group’s first six Berkeley Living build-to-rent projects, representing about £400 million in cost, are progressing well. Berkeley reiterated its commitment to delivering 4,000 build-to-rent homes, though it is reviewing the timing of later phases.
“We believe that it is in the best interests of shareholders to adapt our approach in this way, rather than pursue short-term profit targets,” Berkeley said.
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