Berkeley warns on affordable homes

BERKELEY managing director Tony Pidgley has warned the Mayor of London that inflexible quotas on affordable housing could halt housebuilding in the capital. Last week Ken Livingstone said 50% of new homes in London should be affordable - destined for key workers or low-rent housing associations.

Pidgley said every site should be judged on its merit as some, particularly contaminated brownfield sites, could not be profitably developed with a 50% quota. 'If he insists on 50% I believe development in London will grind to a halt as there will be no incentive to bring the land forward in development.'

The average cost of the 3,182 homes Berkeley sold last year dropped 2% to £273,000, reflecting a greater number of cheaper homes, even though one Thames penthouse went for £4m. At Berkeley's Imperial Wharf scheme next to Chelsea Bridge, half the units are deemed affordable.

Pre-tax profits for the year ended 30 April rose 16% to £196.2m on sales of £976.8m, up 17%. Berkeley's land bank grew by 3% to 20,400 plots and Pidgley said there had been record reservations in the first five months of the year. 'We're very confident but the market does need to soften a little otherwise it is a bit unsustainable,' he adddd. The full dividend is up 11% at 16.5p a share.