Berkeley Group has announced that it will not invest in any new developments, deciding instead to put its interests on its "financial strength", after reporting a rise in profits in the first half of the financial year.

The British housebuilder has said that this decision was a result of the current adverse planning and regulatory environment.

Berkeley reported that in the six months to 31 October, its pre-tax profit increased by 4.6% to £298m, with an operating margin of 19.5%.

The group also witnessed a £10m decline in its operating costs, now standing at £79.7m for the first half of its financial year.

Chief executive at Berkeley, Rob Perrins, said: "Berkeley has demonstrated the resilience of its uniquely long-term business model with today's strong results and is extending its guidance a further year to cover the period to 30 April 2026. Over the current and the next two financial years, Berkeley is targeting the delivery of at least £1.5bn of pre-tax profit and the maintenance of net cash above £400m.

"In today's environment, Berkeley will intensify its disciplined approach to operating cost control and work in progress investment, while continually looking to identify the best development solution on each of its sites for the benefit of all its stakeholders. We are ready and able to deploy capital into new opportunities once the market and regulatory cycles inflect and returns can be earned commensurate with the level of upfront investment and operational risk we undertake."

However, the value of reservations in this period fell by a third due to the impact of elevated interest rates and ongoing "political and macro volatility".

Head of markets at interactive investor, Richard Hunter, added: "Berkeley is making some tough choices in a tough environment and the strategy is currently keeping the group in resilient shape.

"Against the parlous backdrop which the sector is facing, ranging from rising interest rates to doubts over mortgage availability and affordability, the current sales climate is inevitably on the wane. Berkeley has added to this list, citing the planning and regulatory environment as another reason why it is not currently investing in new developments.

"Indeed, the increasingly toxic combination of persistent inflation and the propensity of consumers to buy given the tightening economic environment and a rising interest rate environment have filtered through to lessening demand, with net reservations having fallen by a third, leaving the group to focus on its current and immediate order book and sites."

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