United Kingdom

Rise in costs and shortage of skilled labour fresh hurdles for Berkeley

Investors will be watching these full-year results closely on Wednesday for an indication of how the London property market has held up. 

With the pandemic and remote working driving wealthy city dwellers into the countryside, the main question facing Berkeley will be how demand for its London homes has performed. 

There are serious fears that buyers have not returned as companies tell employees to work from home even when restrictions are fully lifted. 

Yesterday, Deloitte was the latest to tell its 20,000 workers they can work from home forever. Richard Houston, its chief executive, said: 'Our people can choose how often they come to the office, if they choose to do so at all.' 

Analyst Sam Cullen at Peel Hunt warned: 'The London market has clearly lagged the rest of the country, as buyers have looked for more outside space and opted for longer commutes. But there have been signs of a modest pick-up more recently, which could see a swing back in sentiment towards Berkeley.' 

Expectations are that the group will deliver a similar level of profit to last year, with forward sales also looking healthy. Shares have recovered since the pandemic struck and are at levels last reached in February 2020, at 4535p. 

But investors should be wary that a rapid rise in the cost of construction materials and shortage of skilled labour are fresh hurdles – issues the whole industry faces and Berkeley will have to address. 

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