Investing.com — Shares in fell more than 15% on Wednesday after the FTSE-listed developer said it would stop buying land and slash its medium-term profit outlook through April 2030, citing geopolitical turmoil, a worsening economic outlook and regulatory delays adding roughly a year to construction timelines.
The London-focused housebuilder now targets pre-tax profit of more than £1.4 billion over the four years to April 2030, weighted toward the latter part of the period — a sharp retreat from previous guidance of around £450 million for FY26, with a similar level expected for FY27. The stock traded around 2,898 pence in afternoon trade, a 24% discount to tangible net asset value.
Berkeley said it would make no new land acquisitions while current conditions persist, pointing to rising taxes on residential development that have kept land prices elevated even as residential transactions fell. Its focus will narrow to an existing pipeline of more than 10,000 homes in London and the South East.
The company flagged the Building Safety Regulator’s new gateway process as having extended the gap between planning approval and construction start by around 12 months. London new-home starts currently sit at less than 10% of the government’s target, it added.
Berkeley said it had seen modest signs of recovery in early 2026, but that “recent geopolitical events and the macroeconomic consequences, including reduced potential for further rate cuts, could reduce confidence in a near-term market recovery” — a risk it said had “become a reality.”
The group cut land creditors from £900 million to around £470 million and reduced operating costs by approximately 25% in real terms. It targets an operating margin within its historic 17%-21% range and return on capital employed above 15% by FY30, with 11%-15% in intervening years. Net cash will be maintained.
Berkeley said it had delivered £336 million of its £2 billion shareholder returns programme and remained on track to complete it by September 2030, preferring buybacks while the share price trades below net asset value. Its first six build-to-rent buildings, representing around £400 million at cost, were well advanced, with the group remaining committed to a 4,000-home target.
Barclays, which acts as corporate broker to Berkeley, maintained an Overweight rating but cut its price target 18% to 4,280 pence. The bank’s new FY28 earnings estimate sits roughly 29% below Bloomberg consensus, one of the widest analyst-to-consensus gaps in the UK housebuilding sector.
“We believe it is in the best interests of shareholders to adapt our approach in this way, rather than pursue short-term profit targets,” Berkeley said.