Berkeley welcomes 'return to normal market'

The housebuilder Berkeley saw a 36 per cent drop in demand this year but said that it "welcomed" a return to "normal" market conditions.

The company still managed to report record results, with pre-tax profits up 13 per cent to £221.2m, for the year ended 30 April. Berkeley, known for innovative urban regeneration schemes, said the market had cooled from the "unsustainable" rates seen in the first half of the calendar year 2002. The period in 2003 was similar to conditions seen in 2001 "indicating a return to a more normal market".

Tony Pidgley, the chief executive, said: "The true colours of any business are painted most dramatically when the market in which it operates toughens.... The property market in the UK has been subject to some uncertainty for well over a year now; but these are the very conditions we predicted, and planned for, some time ago."

Between November 2002 and April 2003, reservations were 36 per cent down on the "boom" conditions of the period a year earlier. Demand also shifted somewhat from property investors to those buying the properties to live in, with the numbers of overseas buyers also down. Berkeley said sales prices have also fallen but remain ahead of its business plan and that the medium term outlook is "bright".

Berkeley said: "The slow-down in sales price growth is welcome. The market is showing signs of returning to more normal levels of activity as the uncertainty created by world events, falling economic growth and increased Government borrowing is off-set by strong employment, low interest rates and the increasing desire for the types of homes created by Berkeley."