Berkeley Group shares rose on Wednesday after announcing revenue of £1,179.5 million in the six months to 31 October 2025, down from £1,278.9 million in the prior year, whilst maintaining an improved operating margin of 20.8% (2024: 20.2%).
The housebuilder sold 2,022 new homes across London and the South-East at an average price of £570,000, with the gross margin rising to 27.0% from 26.5%.
Sales reservations in the period were approximately 4% lower than last year, impacted by Budget-related uncertainty in the final two months. Forward sales stood at £1,137 million at period-end, down from £1,403 million in April, though Berkeley achieved values slightly ahead of business plan assumptions whilst maintaining pricing discipline.
Despite the softer sales performance, the group said pre-tax profit guidance for FY26 and FY27 remains on track.
“Berkeley’s near-8% slide in first-half profits is a wobble investors are not used to from the South East’s most reliable housebuilder. A drop to £254mn may not sound catastrophic, but for a house builder viewed by some as the sector’s cornerstone, it’s enough to make the sector sit up and take notice,” said Mark Crouch, market analyst for eToro.
“Berkeley insists it remains on track to deliver £450mn this year and a similar figure in FY27, supported by a strong net-cash position, but the update will be a significant body blow, especially after faint signs that the sector might finally be turning.
Crouch continued to explain that there are deep-seated constraints in the UK housing market that will act as a headwind for all UK housebuilders for the foreseeable future.
“Perhaps the inconvenient truth is that the strain UK housebuilders are facing isn’t really about supply at all, it’s about affordability. Mortgage rates hovering around 5% are historically unremarkable, but after a decade and a half of ultra-cheap credit they’ve reset the entire economics of buying a home. Add stubborn inflation, record high taxes and wages that refuse to catch up, and the average buyer simply cannot bridge the gap. Westminster’s new housing initiatives may help sentiment at the margins, but they don’t fix the maths.”
The question investors have is how much of this bad news is already baked into the price. A 2% rise in Berkeley shares on Wednesday suggests much of the negativity is factored in and investors are prepared to buy on any signs of positivity. Berkeley’s maintenance of guidance provided that today.