Berkeley has posted pre-tax profits of £557m in line with its guidance provided at the start of the year, as the property developer also increased its net cash position to over £500m.

The firm has also unveiled plans to launch a build-to-let platform as it targets growth in the rental market.

Berkeley’s latest trading update, covering the year to 30 April, revealed that the group delivered 3,500 new private and affordable homes, of which 87% are on regenerated brownfield land, as it also provided over £370m in subsidies to deliver affordable housing and commitments to wider community and infrastructure benefits.

The group’s chief executive, Rob Perrins, said the developer has overseen “good levels of enquiry” for well-located homes, but that it recognises the current lack of urgency in the market is “likely to remain” until the Bank of England announced a reduction in interest rates.

“This is a strong performance in a challenging and volatile operating environment, demonstrating the resilience of Berkeley’s business model with its focus on the country’s most undersupplied markets,” Perrins said.

“Berkeley continues to benefit from a strong order book and has already secured 80% of its sales for next year, underpinning today's 5% increase in guidance for FY25’s pre-tax profit to £525m, with guidance for FY26 re-affirmed at £450m.”

He added: “Berkeley has identified some 4,000 homes across 17 of its sustainable and well-connected brownfield regeneration sites as an initial portfolio for this platform.

“Developed over the 10 years, and broadly representing a 10% increase in delivery, the portfolio will be financed by a combination of internally generated funds – over and above annual scheduled shareholder returns – debt secured against rental properties once income generating, and the introduction of third-party capital at the appropriate time, thereby fully supporting Berkeley’s long-term corporate 15% pre-tax ROE target.”

Manager of the Quality Shares Portfolio at Wealth Club, Charlie Huggins, added that Berkeley has delivered a “resilient performance in a difficult trading environment”.

“There is no other housebuilder that can deliver urban regeneration schemes of this scale. This has resulted in another year of strong margins and excellent cash flow, underpinning significant cash returns to shareholders,” Huggins said.

On the plans for the build-to-rent platform, Huggins added: “This seems like a shrewd move, giving Berkeley greater capital deployment options. However, it could also be a sign that Berkeley believes tough housing market conditions are here to stay.”

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