London boost for Berkeley

HOUSEBUILDER Berkeley says it has hit over £1bn in forward sales, up from £813m last May, driven by strong demand for residential property in London and the south east.

The firm used a trading update to announce that it had acquired seven sites for a total of £80m since November, including a former Royal Mail sorting office in Twickenham and a site on Albert Embankment in London with consent for 242 new homes.

As a result the group bullishly predicts that potential income from its current land bank “will exceed £2.5bn” by the end of 2012.

Berkeley also said it is on track to double profit before tax to some £220m by April 2013, two years earlier than originally planned.

“This puts in place the solid foundation from which to return £13 per share in cash to shareholders by September 2021,” the firm said.

Berkeley, which sells largely to buy-to-let investors and overseas buyers, emphasised that London’s global appeal was underpinning sales to international purchasers: “The attraction of London as a World City is key to underpinning sales to international buyers and the current constrained supply of quality new homes in the best locations in the South East of the UK places a premium on Berkeley's product.”

Shares in the firm closed down 1.9 per cent at £13.67.