Housebuilder Berkeley Group has said market conditions in London and the South East were “robust” in the first quarter but it warned Brexit concerns and high transaction costs “constrained” the wider housing market.
The high-end developer told investors ahead of its annual general meeting that pricing also remained stable during the period from May to August.
Despite warning of the shadow of “uncertainty in the macro political and economic environment” over the housing market, it said there is still good demand for homes and good mortgage availability.
The London-listed firm saw shares lift higher in early trading after it said forward sales remained above £1.8 billion.
Berkeley also told investors it is targeting a total of £3.3 billion in pre-tax profits for the next six years, forecasting between £500 million and £700 million in profit per year over the period.
It also said it expects net cash for the half-year to be at a similar position to the full-year figure of £975 million posted earlier this summer.
Berkeley said it is currently working on more than 20 of the largest residential development opportunities in London and the South East.
In a statement, the company said: “While very mindful of the potential for short-term market dislocations from the current political back-drop, we remain steadfast in our belief in the long-term resilience and attraction of our markets of London, Birmingham and the South East.
“We continue to work with our supply chain to assess and address the risks associated with disruptive Brexit to the extent this is possible, including accelerating the delivery of certain materials and components.”
The announcement was made ahead of the housebuilder’s annual general meeting, where it is expected to face a backlash from shareholders over executive pay.
Robin Hardy, analyst at Shore Capital, said: “As usual there is relatively little detail on trading in this update save to say that Berkeley indicates that the market is stable – in house building industry-speak this is towards the cautious end of views of the market for the short-term.
“However, as the statement sets out, Berkeley’s vision is increasingly long-term and the building blocks continue to be put in place to ensure at least stability at a lower level of profit now that the period of supernormal profitability driven by the prime central London market has run its course.”
Shares in the company rose 1.8% to 3,945p in early trading on Friday.