British high-end homebuilder Berkeley has today lifted its earnings outlook by 5% for fiscal year 2025 and said it would establish a build-to-rent platform, encouraged by strong demand for rental homes in London and South East England.
Sticky inflation in Britain has clouded the outlook for monetary policy easing, tempering expectations of a swift recovery in the housing market despite signs of stability at the start of 2024.
Berkeley CEO Rob Perrins said the launch of the build-to-rent segment was aimed at maximising returns in the current market conditions, and the group has identified about 4,000 homes across its 17 brownfield regeneration sites as an initial portfolio for the platform.
The company, which unlike its bigger rivals, focuses on redeveloping land that was previously used for industrial purposes, said the current lack of urgency in the housing market was likely to remain until the start in reduction of interest rates.
Berkeley, which operates across London, Birmingham and the South of England, said pre-tax profit was down 8% at £557.3m for the year ended April 30. But it beat analysts' average expectations of £549.5m, according to LSEG data.
The company raised its annual outlook for pre-tax profit to £525m, saying that it continued to benefit from a strong order book and good enquiries for homes in the country's most under-supplied markets.
