By Aby Jose Koilparambil
(Reuters) -British homebuilder Berkeley said the extensive regulatory changes taking place in the country’s housing sector were putting substantial pressure on new home deliveries as it reported a modest improvement in homebuyer demand on Friday.
The company said homebuyer enquiries were at a “consistently good level”, and that it had seen a “modest improvement” in bookings in the four months to February 28.
But, it warned that the housing sector in Britain has seen significant regulatory reforms in recent years that are aimed at bolstering building safety and rectifying systemic issues, which are delaying developments.
As part of its goal to see 1.5 million homes built in the next five years, Britain’s new Labour government last week laid out plans to scale back lengthy public reviews that can delay housing developments.
The housing market has been severely under-supplied, and a lag in interest rate cut expectations, coupled with broader economic challenges, have aggravated affordability concerns for homebuyers.
The “Building Safety Levy”, designed to fund the remediation of historic building safety defects so that leaseholders and taxpayers do not bear the financial burden, is expected to be rolled out in September this year, with key updates imminent.
Berkeley said it was also preparing cases required under different safety regulations covering high-rise residential buildings and called for a review of that process to speed up construction and help meet Britain’s housing targets.
Still, Berkeley, which specialises in redeveloping land previously used for industrial purposes, maintained its earnings forecast for the fiscal year ending April 30 at 525 million pounds ($679.19 million).
“The housing market is showing signs of improvement, but a continued supportive macro and policy backdrop is required to see meaningful incremental improvement and a more sustained recovery,” said Investec analyst Aynsley Lammin in a note.
($1 = 0.7730 pounds)
(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Sonia Cheema and Elaine Hardcastle)
