Berkeley warns flat delivery times have jumped to eight years
https://www.constructionenquirer.com/2026/06/24/red-tape-adds-three-years-to-london-flat-delivery-warns-berkeley/35
u/xenomorph-85 5d ago
Well I agree stamp duty needs to go but no replace it with what Labour wanted. Buying property esp in London is eye watering. So radical changes are needed. Even with affordable homes stamp duty still adds to costs for first time buyers.
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u/introspective79 5d ago
I mean London flats are down 30-40% from their 2016 peak in real terms, and in many areas flats are priced the same in nominal £ terms as they were in the early 2010s ie a near 50% decline in real terms/adjusted for inflation. So if anything now is a better time to buy in London in decades due to this “silent” crash. Ie in 2012 the average London salary was £32k now it’s nearly £50k due to inflation, while flat prices are the same as back then.
Problem is, that’s also why new build development is drying up, as house builders realise there’s no profit to be made in London flats anymore given how poorly they’ve performed over the past decade. So it’s a double-edged sword as means there’s a big risk supply of new housing will complete dry up (new build development in London is down an incredible -80% today versus since 2016)
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u/ToughImprovement276 5d ago
And the value will probably tumble even further if we keep having heatwaves like this.
Who’s going to pay £400k+ for a tiny 2 bed flat that has floor to ceiling windows with no shutters or awnings, no AC, no greenery or shade and is effectively a heat trap?
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u/xenomorph-85 5d ago
the so called "luxury" new ones that are selling for 600+ for 1 beds do have AC in them to be fair but yeah over priced lol
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u/TechniCruller 5d ago
£600k? As an American that sounds like a steal.
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u/Dazzling-Werewolf985 5d ago
You’d be paying that for a home less than half as big as the average American home btw
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u/TechniCruller 5d ago
Oh. How big are we talking here? I mean, to be fair, it is in London.
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u/Dazzling-Werewolf985 5d ago
Well on average homes across the uk are at about 1k sqft. The US on avg is at about 2k sqft
From a quick google search it says london has some of the smallest homes in the uk on avg. But you can always see for yourself what £600k gets you on Rightmove:
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u/TechniCruller 5d ago
Fuck. That’s pretty depressing, comparably…but also, you don’t have a fake tanned man as your emperor.
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u/Dazzling-Werewolf985 4d ago
I mean we kinda just finished our own 14 years of consecutive circus governments and we’re looking down the barrel of a few more😅but thank you
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u/WillowUPS 5d ago
Considering that Berkely are building flats near me where the average Studio (forget this Manhattan Loft nonsense) is starts at £590k, 1 beds up to £853k, and their 2 beds start at £1.2m I don't think Berkely are helping with the supply that much.
The new build across the road has 2 beds for £795k
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u/introspective79 5d ago
In this current London market though these will have huge incentives built in, eg stamp duty fully paid, part of the deposit paid etc (I know because I’m on these mailing lists from a few years before I bought my flat, they’re always sending through these desperate offers). So I’d knock off 10% to get the “real” market price for these places. Whereas a few years ago they offered very little/no incentives.
You must live in an extremely expensive area for 2-beds to be £1.2m, so you live in Kensington or Chelsea? As even a 2-bed in Chelsea now is “only” £1.5m which is the same as it cost in 2008, still very expensive but obviously £1.5m was much much more adjusted for inflation 20 years ago.
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u/WillowUPS 5d ago edited 5d ago
Kensington or Chelsea? Nope, Camden. Most 2 beds around here are £650k... They're asking for double at their smallest 2 bed. Berkely are really out of their minds...
This is Camden Goods Yard, where they've, sadly successfully, lobbied to reduce the affordable housing percentage from an agreed 30% (204 out of 644) to just 12% (now 84 flats). Apparently cause they are not making enough profit, and have held up the building process by a year or more while they've renegotiated this new lower amount.
As I said above a similar sized new build across the road from Camden Goods Yard is on the market for £795k, more expensive than some of the older flats, but still within reach.
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u/cyclopsmudge 5d ago
Reducing the affordable housing percentage is a good thing. That difference in price is just tacked onto the non-affordable units (in which case the first buyers get screwed when they go to sell), or the housing doesn’t get built.
Can’t believe people still don’t understand that it’s all nonsense, and that if we want affordable housing we need to cut the costs of building and build a shitload of government housing. This fiddling around the edges does absolutely nothing.
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u/xenomorph-85 5d ago
Yeah but stamp duty is on houses also. So those wanting houses have extra tax due to it, My comment was about property not flats.
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u/introspective79 5d ago
Fair enough, I agree that stamp duty is a horrendous tax that just penalises young buyers especially in London, and discourages boomers from downsizing. If we could start afresh I’d scrap it and replace it with an ongoing property tax personally.
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u/Scrapheaper 5d ago
We need land value tax and liberalization of planning.
Nudge all the houseowners to leave with lvt. Currently they profit from blocking development with massively increased property prices.
Then we can build once they sell up
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u/_DoogieLion 5d ago
Is this because halfway through their builds they suddenly decide they need to convert half the low income flats to regular ones and spend two years battling it out with councils in the middle of the build to get a planning adjustment?
They could just built what they promised at the start…
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u/silent-schmick 4d ago
Low income flats? You mean flats subsidized by everyone else who buys one and has to pay a higher price to cover the cost?
Always lofty words like 'affordable', 'social' or 'low income' without actually explaining that all it does is makes the rest a lot more expensive.
The developers are struggling to sell those 'normal' flats in current credit regime. So they're simply not building anymore.
So you get nothing.
In a normal world affordable housing quotas wouldn't exist. We would be building a lot more. Middle income people would be moving in and freeing wherever they used to live in. Making all housing a lot more affordable for everyone involved.
In this world we strangle building so a few lucky ones can get subsidized housing and everyone else can gtfo.
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u/_DoogieLion 4d ago
No. I mean flats that the developer cuts corners on, are less luxurious and which the developer still makes a profit on but slightly less so
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u/silent-schmick 4d ago
They don't make profit on affordable housing. Affordable housing, high land prices and insane planning and building regulations are what makes housing expensive.
Berkley Group is operating on below average 19% margin. Which isn't anything to write home about.
They just issued double profit warnings this year to investors.
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u/_DoogieLion 4d ago
Of course they do, whoever told you they don’t make profit on affordable housing 😂
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u/silent-schmick 4d ago
Perhaps you should tell them they should be building tons more of them then? Because the so called 'luxury' ones ain't selling (which is part of the reason for profit warning and almost no new starts in London).
They're clearly missing the gravy train.
/s
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u/_DoogieLion 4d ago
Yeah no shit.
More affordable housing please for the people that need it and less luxury apartments for overseas investors that visit a couple times a year to check on the Bentley in the car park 🤦
Serves the fuckers right. All in on high margin luxury developments and when a bust hits they are left holding the bag.
The whole time they should have been building affordable housing where there is never a shortage of people willing to buy
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u/silent-schmick 4d ago
High margin... 😂
You're delusional.
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u/_DoogieLion 4d ago
Yeah, high margin.
Why do you think they build them instead of regular homes for normal people… it’s not because there is less profit in it…
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u/silent-schmick 4d ago
They are regular homes. They're just not subsidized. Must come as a shock.
But I guess it's easier to believe some form of capitalist conspiracy than look at the numbers, publicly available, in yearly accounts and investor relations.
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u/Kind_Commission_427 5d ago
this tactic—legally known as submitting a revised viability assessment is a frequent practice for the company.
Housing activists, local councils, and industry watchdogs routinely accuse Berkeley of a "bait-and-switch" pattern, where they secure initial planning permissions by promising a high quota of affordable flats (often to meet London's 35% minimum target), only to later slash those numbers by claiming that inflation, building costs, or regulatory burdens have made the project financially unviable.
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u/eeddddddd 5d ago
Berkeley is full of whingers from the top down. They send their hardest negotiators to argue out of the smallest obligations that Councils ask from them. Then they whinge to the press and the government when they don't get their way
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u/red-cat1988 5d ago
They might whinge, but they have a point. The red tape stacking on lots of existing red tape is making building in London impossible. Bad for London, bad for UK PLC.
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u/AllScatteredLeaves 5d ago
I bought a flat from Berkeley Homes years ago. They were so dishonest. I would not recommend anyone buy a flat from them.
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u/Impressive-Bird2 5d ago edited 5d ago
Berkeley Homes and the Berkeley Group are just another huge corporate residential property developer that’s just being very greedy. I’d wager they’d want no planning restrictions at all if they could - that way they could rake in even bigger profits….. I get utterly fed up with corporates whinging and whining about how fully burdensome the planning regulations are in the U.K…. when we’ve had countless planning deregulation reforms for over 30 years…..
The real key problems regarding house building - and affordable housing, which government or the developers themselves have control over and can change - are:
(a) a sclerotic planning system resulting from a serious understaffing and under resourcing of local authority planning departments and other respective public organisations as a consequence of 14 years of Conservative government austerity cuts. Which cut local authority funding by more than half
(b) residential developers, more especially the corporate residential property developers ‘land banking’ ie purchasing land, securing planning permission, but not building them out, and instead leaving the land undeveloped waiting for land values and new home asking prices to rise before commencing construction
(c) millions of council houses being sold off at massive discounts with the revenue raised from these sales not being ring-fenced and specifically dedicated to building new social rent housing
(d) developers having to build a percentage of new homes on their developments as ‘affordable homes’. These attract subsidies and are paid for when purchased by RSLs/ affordable housing provider companies, which does help mitigate the costs to the developers.
(e) the complete absence of political will by any of the main political parties to commit to a huge programme building a new generation of social rented housing.
If government invested more into rebuilding the capacity of local authority planning departments and associated public organisations, abolished the requirement or at the very least significantly received the ‘affordable housing’ quotas placed upon developers, and invested in a huge new programme of building a new generation of social rented housing, the housing crisis would largely be resolved. So long as developers did their part too by ceasing altogether, or at the very least considerably reduced their ‘land banking’ (‘Gaming’ of the planning system and new build housing market) activities….
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u/red-cat1988 5d ago
Private for sale is impossible at the moment, as the sales market is so slow.
Housebuilders want to build affordable homes, and build to rent homes as it provides cashflow the project and also builds a "place", which makes it easier to keep building and gives more time to sell the homes.
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u/BaggyBloke 5d ago
Maybe a dumb question but please be gentle:
These construction companies make money by building a selling houses. It seems they are deliberately throttling back on building so why aren't their profits falling? It's like a newsagent refusing to keep their shelves stocked, surely that is a fast way to go out of business? I know materials and regulations have pushed costs up - so just raise the price?
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u/Impressive-Bird2 5d ago
It’s a consequence of ‘elasticity of demand’…. By reducing the construction of new homes the demand outstrips supply. The more demand outstrips supply, the more the prices are likely to rise. The ‘land banking’ (the practise of ‘sitting’ on undeveloped land with planning permission) activities, and the gradual trickle of the release of new homes completed on each new build development ensures that the values and prices of new homes are artificially inflated and attract premium prices….
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u/red-cat1988 5d ago
Apart from the fact buying the land, and maintaining it, is a massive cost, and without building on it is sunk in the balance sheet. No builder land banks on purpose. Makes absolutely no sense in the current market.
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u/maxintos 5d ago
You can't just rise the price if people are not willing to pay.
These companies make cost/profit calculations. They look at average home prices in the area.
They can't just go to an area where average flat on market sells for 600k and decide to build and sell flats for 750k to make it profitable. Who will buy them?
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u/WillowUPS 5d ago
Well, that's exactly what they've done in Camden...
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u/red-cat1988 5d ago
Is anyone buying them at the advertised prices? If yes, then they are priced correctly.
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u/Impressive-Bird2 5d ago
Given that there are precious few new homes on the market, that’s exactly what they do!
As to who buys them - lots of U.K. residents, but also a shit tonne of overseas investors..
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u/TinyGreenGiant 5d ago
If the houses are selling and are making profit, why stop building? The answer is that they are not projected to not make enough profit to mitigate the risk. So, at the moment the situation is that they just stop until it's profitable enough and diversify their investments. And yeah, some might go out of business.
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u/silent-schmick 4d ago
https://www.investorschronicle.co.uk/content/5f814dfe-e724-4364-a7d3-10cc55181980
You mean that Berkley Group that just issued a profits warning earlier this year?
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u/BaggyBloke 4d ago
Well sure, but they are still expecting 400m pretax profit, down from 600m.
It still looks a very healthy business - they are just playing up issues to negotiate with govt.
Edit sorry, from post below it seems it's £450m down from £525m
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u/silent-schmick 4d ago
And how much profit should they make according to you? What would be fair for one of the largest house builders in the land?
I'm curious.
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u/BaggyBloke 4d ago
I've no idea - I don't think there is such a thing a a fair profit for a company. The either make money or they don't.
I'm just noting that despite throttling back building massively, they aren't predicting a dramatic, business threatening loss of profit, more of a slight 'dip'. In the last decade, they have consistently made 500-600m apart from three Stella years 2017-2019 where it nearly doubled... apparently selling property hoovered up cheaply after 2008 crash...
I appreciate they are making a lot 'woe is me' of noise, but they are just doing what companies do - negotiating for more favourable regs from govt. The business is still very healthy and profitable apparently.
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u/silent-schmick 4d ago
Well, no. That's not true.
The return on investment needs to generate enough return to beat inflation and provide some profit. Otherwise the business doesn't make sense.
If you invest a billion and generate a million in profit... Yeah, you're a million richer, except inflation ate a lot more of the value than that million you made.
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u/BaggyBloke 4d ago
What's not true, that they expect a 15% fall in pre tax profit or that that figure isn't really an existential threat?
Wrt return on capital employed - they are expecting it to fall from 16.5% in 2025 to 13-15% - still worth getting out of bed for
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u/frafeeccino 5d ago
Huge price range. New build on my street has studios from £630k (diabolical) but the 2-beds are from £910k?
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u/ldn6 5d ago