Housebuilder Berkeley Group has said it expects to see house sales “remain subdued” as its reservations dropped by a third.
It came as the London-listed firm’s profits lifted for the past half-year despite completing fewer homes in the face of the “challenging” market backdrop.
It comes after a raft of rival housebuilders have also cautioned over weakness in the market in the face of soaring interest rates and tighter household finances.
“During the last six months, macro volatility has increased, domestically and abroad, with the prospect of UK interest rates remaining higher for longer and weak economic growth projections,” the firm said on Friday morning.
“We anticipate the sales market will remain subdued before inflecting in its normal cyclical manner once there is greater confidence in a downward trajectory for interest rates and economic stability returns.”
Berkeley also said it completed fewer homes over the latest period, delivering 1,785 homes, as well as 204 through joint ventures, over the six months to October 31.
This dropped from 2,080, and 251 from joint ventures, over the same period last year.
Nevertheless, Berkeley also revealed that pre-tax profits grew by 4.6% to £298 million for the six-month period, compared with a year earlier.
In the firm’s update to shareholders, bosses were also critical of UK planning and regulation rules.
Rob Perrins, chief executive, said: “Despite urban regeneration being a clear national priority, it has become increasingly difficult to progress this form of development as changes to planning, tax and regulatory regimes have created an increasingly uncertain, unpredictable and burdensome environment.
“This is driving investment away from urban areas, restricting growth and preventing homes and other tangible benefits being delivered.”