Home building Stand-off with Government as BTL fallsMake Text Bigger
The Berkeley Group, one of the UK’s largest home builders, has said that despite government pressure it is unable to ramp up house production.
Prime Minister Theresa May has told builders to “do their duty to Britain” and that she wanted “to see planning permissions going to people who are actually going to build houses, not just sit on land and watch its value rise.”
However, the Berkley Group have defended their position with one of the factors slowing new construction being the fall in demand from new Buy to Let investors caused by the increase in Stamp duty for second homes and mortgage interest relief restrictions under Section 24 rules.
This reduces the level of upfront landlord finance available to builders for new developments and is a real life example of how the PRS assisted home building instead of the misconception that landlords were stealing properties from under the noses of potential first time buyers.
They also listed the high cost of moving house, economic uncertainty and a limit of mortgage lending as further constraints to its ability to increase production levels as demanded by the Government.
Berkeley said: “These factors, together with the changing planning environment and the time and complexity of getting on site following planning approval, mean that Berkeley is currently unable to increase production beyond the business plan levels.”
“Berkeley remains cautious in its investment strategy, acquiring land selectively in the trading period, and anticipates cash flow will be broadly working capital neutral over the course of the year as a whole, subject to any large land transactions that might arise before 30 April 2018.”
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