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Business Comment

James Moore: Berkeley's success is based on London's fundamentals

Outlook The housing market bubble isn't bad for everyone. Take Berkeley New Homes, which is positively basking in the glow from the inferno that has enveloped London.

The upmarket property developer cantered home like Frankie Dettori in a top race at Ascot, with a 40 per cent rise in profit, putting it at the top of the City's forecasts after building 30 per cent more new dwellings than at the peak of the market in 2007.

Founder Tony Pidgley racked up more than £16m in dividends, and it'll probably be bonuses all around for his boardroom pals.

Not that his investors will probably make much of a fuss. The company is on track to return £1.7bn to them by 2021 so the institutions will likely give Berkeley, which to be fair steered a fairly steady course through the credit crunch, a pass on issues like that.

Can the gold rush continue? The City's fretting about comments by the Governor of the Bank of England, Mark Carney, who has promised measures beyond those already taken to cool the market if things don't start to calm down soon.

But he may be able to cork the pressure only temporarily. London's population is growing faster than its housing stock.

Without any action to, for example, deal with the large numbers of empty properties that clutter the capital, companies like Berkeley will continue to find themselves in a seller's market. The market's fundamentals suggest the fall in Berkeley is overdone.