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Number of new homes this year will beat pre-recession peak

Berkeley Homes plans to build 30pc more new homes than in 2007

Rob Perrins, Managing Director of Berkeley Homes PLC
Rob Perrins, managing director of Berkeley Homes, stands next to a model of a future development as part of his plans to increase new build levels by 30pc this year. Credit: Photo: Clara Molden

Housebuilder, Berkeley Homes, plans to build 30pc more homes this year than in 2007 as the construction industry gears up to beat the pre-crisis peak.

The FTSE 250-listed housebuilder intends to complete 3,700 new builds over the course of the year, overshadowing the 2,600 built in the boom era, just months before the UK housing market collapsed.

In its interim results, the group forecasted strong growth, with £1.9bn owing on forward sales for the four months to 28 February, up from £1.75bn at 31 October 2013.

Berkeley, known for its plush riverside developments such as Battersea Reach in south west London (pictured below), has also built more than 10pc of all new affordable homes in London over the past six years and created 10,000 new jobs.

Riverside developments in London: Battersea Reach

Berkeley, along with its rival volume housebuilders, is increasing the number of new homes built in the UK to tackle the growing supply crisis, despite a shortage in raw materials and skilled labour.

“Berkeley Group is London’s housing bell weather – if it is sharply ramping up its completions to exceed 2007 levels it means that there are still good times ahead. Berkeley has a proven track record of calling the market so investors in the wider housing market should note it has a tendency to ramp up volumes before a peak,” said Martyn King, analyst at Edison Investment Research.

"With a deep cushion of cash and a healthy land bank, Berkeley still has plenty of headroom room to up volumes given the huge shift in demand-supply imbalance in London since the last crash," he added.

The Group, which has acquired of five further sites in the second half of the year, said house building had been boosted by wider economic growth and the Government’s shared equity Help to Buy scheme.

Susan Emmett, Savills residential research director, said: "The extension of the equity loan element of Help to Buy [until 2020] is good news. It encourages housebuilders to increase construction and accelerate the delivery of much needed homes."