Berkeley (LON: BKG), one of Britain’s biggest house-builders, has said that it cannot speed up production of new homes.

Responding to increased pressure from the government, Berkeley has said that various ‘market constraints’ means it is impossible to boost their housing supply.

Two weeks ago, Theresa May put pressure on housing groups to do more to tackle the UK’s housing shortage.

The prime minister said she would not tolerate the slow rate of housebuilders and more needed to be done.

“I want to see planning permissions going to people who are actually going to build houses, not just sit on land and watch its value rise,” she said.

In her keynote speech, May said that failure to meet the targets could result in local councils losing their right to decide where developments take place.

Berkeley responded and have said it is not possible to ramp up production of UK homes due to factors including economic uncertainty, the complexity of Britain’s planning system, and current mortgage lending limits.

The housing group told shareholders: “The market conditions in London and the South East are unchanged from the first half with home movers and downsizers continuing to be constrained by high transaction costs, the 4.5x income multiple limit on mortgage borrowing and prevailing economic uncertainty.

“In addition, domestic buy-to-let investors, who buy early in the cycle and provide security of cash flow to enable complex, capital intensive developments to be brought forward, are further impacted by additional transaction costs and the removal of interest deductibility.

“These factors, together with the changing planning environment and the time and complexity of getting on site following planning approval, mean that Berkeley is currently unable to increase production beyond the business plan levels.”

Following the statement, shares in Berkeley dropped by almost six percent in morning trading.