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In it\u2019s half-years results update today the company said: \u201cBerkeley has experienced highly competitive tendering across most trades during the period, as our supply chain looks to secure near-term work in an environment where housing and wider construction activity remain subdued, particularly in London.<\/p>\n
\u201cThese conditions have offset the inflationary impact of increases to the National Living Wage and employers\u2019 National Insurance contributions, and with material prices stable, build costs remained flat during the half year.<\/p>\n
\u201cWe expect these competitive market conditions to continue into 2026, with build costs likely to remain broadly unchanged.\u201d<\/p>\n
Berkeley also warned about skills shortages intensifying across London due to Government policies.<\/p>\n
It said: \u201cHowever, we remain mindful of ongoing regulatory changes, including the Building Safety regime and Gateway 2 requirements, and recognise that prolonged weakness in construction activity increases the risk of skills and experience leaving the industry.<\/p>\n
\u201cA lack of new project starts and delays to live projects is placing financial strain on the supply chain, and Berkeley continues to work closely with its trusted partners to maintain delivery capability.\u201d<\/p>\n
Berkeley said it will prioritise shareholder returns in the current environment.<\/p>\n
Rob Perrins, Executive Chair, said: \u201cBerkeley has great optionality in its 10-year strategy for the allocation of capital between its three value drivers: investing into the core business; investing into Berkeley Living, its BTR platform; or delivering returns to shareholders through share buy-backs or dividends.<\/p>\n
\u201cIn today\u2019s operating environment, we will carefully match delivery to the underlying market demand and the pace of the BSR\u2019s gateway approval process, prioritising cash flow over the income statement, and deliver Berkeley Living\u2019s initial BTR assets, stabilising income ready for the introduction of third-party capital.<\/p>\n
\u201cBased on our current financial position and operational focus, coupled with the dislocation in the share price, we will prioritise shareholder returns in this environment.\u201d<\/p>\n<\/p><\/div>\n