HOUSEBUILDER and urban regeneration specialist Berkeley today said the housing market in London and the South East had stabilised as it reported better-than-expected annual results.
The group posted pre-tax profits of £110.3 million in the year to April 30 - down by 8.4% on a year earlier, although this was a smaller fall than most analysts had pencilled in.
Berkeley said while there were "attractive opportunities" opening up in the land market, property transactions were 40% down on historic levels.
Berkeley said its target market in London and the South East was being buoyed by demand from cash rich investors and overseas buyers taking advantage of the weak pound.
Customers snapping up properties for investment accounted for more than 50% of underlying sales reservations, according to the group.
Sales prices were ahead of its targets set a year earlier and completions leapt 47% higher to 2,201 in the year.
But a change in the type of properties sold saw average sale prices fall from £395,000 to £263,000 - largely accounting for a 12.4% drop in group revenues to £615.3 million.
The group said the industry was still digesting the implications of this week’s Budget spending cuts and tax hikes.
It added there were still "residual imbalances from the financial downturn, which will continue to affect the wider economy and the sector".
However, it is aiming to grow its land bank and earnings per share by 10% over the next 12 months.
"The demanding nature of this challenge should not be under-estimated in these severely testing times," said the group.
The firm has weathered recession in far better shape than rivals.
Unlike many debt-laden peers who had to be bailed by lenders, the firm is free of borrowings and ended the financial year with net cash of nearly £317 million.
The group, which is led by highly-respected chairman Tony Pidgley, shifted focus from volume housebuilding in 2004 to return cash to shareholders and also held back from expensive land purchases in 2006 and 2007 near the peak of the market.
The group - based in Cobham, Surrey - also has urban developments outside London including Portsmouth’s £200 million regeneration project at Gunwharf Quays and Kennet Island in Reading.