The boss of London’s biggest brownfield builder backed Labour’s manifesto pledge to make new homes a priority today, as he hit out at the complexity of the current planning system.
Rob Perrins, the long-serving chief executive of Berkeley Homes, said: “Getting the election out of the way is a really good thing for London.”
With a change of tenant looking likely in Downing Street, he told the Standard: “I am encouraged by Labour’s engagement with business and their commitment to work in partnership to deliver good, green homes”.
Pointing to the party’s “ambition for growth” he said: “They see that through home building and they want to make it a top priority across government, which is great as a mission … they can be a very mission-focused government”.
Labour and the Conservatives both want to build 1.5 million homes in the next five-year Parliament.
“I do believe we can get the starts by the five year [term of] government”, said Perrins, an industry veteran who will have been in the top job at Berkely for 15 years in September, putting him among the longest-serving FTSE 100 chiefs.
“I think completions will be hard – and they are achievable – but we musn’t under-estimate the challenge.”
Berkeley is known for its focus on London and the south east and the extent to which it redevelops brownfield sites, with 87% of the 3,521 new homes it sold in the year to the end of April built on that type of site.
But with interest rates at a 15-year high of 5.25% in the period making mortgages more expensive, the number of homes sold was down 13%. That hit profits, which were down 8% to just over £557 million, in line with guidance.
Perrins singled out red tape. “There has been so much regulatory change. That has to end. There has to be a simplification of the system. All well intended, but we have have so much change, it has really confused the current system”.
Looking ahead, Berkeley was more positive. The firm that builds about 10% of the capital’s new homes, for both private sale and as affordable homes to housing associations, upped its profit guidance for 2025 by 5% to £525 million.
With interest rate cuts on the way – expected to start this summer, if not at the Monetary Policy Committee’s next policy meeting tomorrow – there are hopes that the wider housing market slowdown will lift.
“The Bank of England reducing rates will be good”, Perrins said, while action on the “demand side” would help, with “higher loan-to-value mortgages”.
And he repeated a call made before: “I’d love them to reduce stamp duty”, the tax paid on home sales.
“I’m very optimistic about the future of London. It will remain a world city. We just need to carry on building the homes we require.”
Shares in the firm fell 188p to 4822p.
Richard Hunter, head of markets at Interactive Investor, said: “The market consensus for the sector generally remains in relatively cautious mode which is likely to last until the corner has finally been turned, as interest rates ... begin a downward trajectory.
“As such, the general view remains that Berkeley is a hold for the time being, even though its prospects are becoming increasingly evident.”
