Berkeley slams ‘poor’ Government measures to cool housing market

Housebuilder Berkeley has attacked Government measures designed to help cool the country’s surging housing market, saying they were a poor policy response that would prevent house purchases by people who could afford them.

House prices have risen by 11 per cent over the last year, data showed earlier this month, benefiting housebuilders but leading to concerns that the property market could overheat and pose a risk to financial stability.

Chancellor George Osborne said last week he would give the Bank of England stronger powers to curb mortgage lending, by stopping people taking out loans that are too big compared with their income or the value of their home.

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The comments sent shares in leading housebuilders including York-based Persimmon down more than 4 per cent on the day.

“If you bring (in) these new rules, you stop people buying, you’re stopping people who can afford to buy, so personally I think the changes that the Bank of England proposed on mortgages are poor,” said Rob Perrison, managing director at Berkeley.

“It’s a really bad thing. I think you should allow the mortgage market to work, the key thing is employment. People when they do buy a home and they are in employment, they will save to pay their interest payments.”

The housebuilder, which said it had created 3,000 new jobs in the year ended April 30, has seen its profits jump in recent years thanks to strong demand for its London homes from overseas buyers.

It has been further helped by improved buyer sentiment stoked by Government schemes to help first-time buyers.

Mr Perrins’ comments came after Berkeley posted a 40 per cent rise in full-year pre-tax profit to £380m, beating analyst forecasts, and said it was on track to deliver further growth in the long term.