Berkeley, the housebuilding company, has expressed concerns over the ongoing incremental regulatory changes that are putting significant pressure on the delivery of new homes, despite the recent announcement of planning reforms.
The regulation surrounding home construction has seen an increase, especially in the aftermath of the Grenfell tragedy, as reported by .
The Building Safety regulator, responsible for setting rules to safeguard the design and construction of higher-risk buildings, has introduced a plethora of new rules and processes for builders to adhere to.
Under the newly implemented gateway process, a development must now pass through three gateways before it can be deemed safe for occupation.
"Berkeley remains concerned by the impact of the extent and pace of regulatory changes of recent years, as we now await details of the new Building Safety Levy. Taken together, these incremental changes place significant pressure on the delivery of new homes," the firm stated.
The Building Safety levy, which was introduced post-Grenfell, aims to ensure that neither taxpayers nor leaseholders bear the cost of rectifying building safety defects.
"We are working hard in preparing the Building Safety cases required under the pre-start on site Gateway 2 approval process implemented by the new Building Safety Regulator."
Berkeley, the FTSE-100 housebuilder, has called for a review of the housing delivery process, stating: "Alongside the rest of the industry, including the G15 group of Housing Associations, we believe a review of this process is necessary to ensure it meets its objectives without incurring further delays to delivery, and thereby supports the Government's housing ambitions," The company also expressed its support for the government's housing goals, saying it was "hugely encouraged by the change in mindset over planning."
However, RBC researcher Anthony Codling noted that Berkeley's complaints about the pace of regulatory change were typical, stating: "In short Berkeley is on track to deliver on its promises, and back to moaning about planning. This is the Berkeley we know and love!"
In addition to these comments, Berkeley released a trading update for the period from November 1, 2024, to February 28, 2025. The firm reaffirmed its earnings guidance, aiming to deliver at least £975m of pre-tax profit across 2025 (£525m) and 2026 (£450m).
Codling commented on this, saying: "Berkeley reiterated today that it is on track to meet its pre-tax profit guidance... Few housebuilders have the confidence and visibility to make such pronouncements, and in a market punctuated with uncertainty it is easy to see the attractions of investing in the shares of Berkeley Group."
The company also reported a "modest improvement" in sales reservations, with sales surpassing those achieved last year.
"For this improvement to continue and sales rates to return closer to the levels of three years ago, there needs to be greater confidence in the trajectory of interest rate reductions and wider economic stability," stated Berkeley.
