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World Economy
Apr 01, 2026

Berkeley Halts Land Purchases and Implements Hiring Freeze as Iran War Triggers UK Housing Market Shock, Forecasts £1.4bn Profit by 2030

AI Summary
London‑focused housebuilder Berkeley announced a stop to new land acquisitions and a hiring freeze amid heightened geopolitical risk from the Iran war, rising costs and weaker buyer demand. The firm upgraded its pre‑tax profit outlook to over £1.4 billion for 2027‑2030, but its shares fell sharply, reflecting broader sector stress as mortgage rates climb above 5% and competitors also see steep declines.

Berkeley, one of Britain’s largest housebuilders, said it will cease buying new land and impose a hiring freeze as it confronts the impact of the Iran war and broader geopolitical volatility on the UK property market.

The FTSE 100 company warned that a reduced likelihood of further interest‑rate cuts and soaring regulatory costs could weigh heavily on its business, prompting cost‑cutting measures that also include using fewer subcontractors.

In a significant outlook revision, Berkeley now expects to generate more than £1.4 billion in pre‑tax profit between 2027 and 2030, a stark increase from the roughly £450 million it had forecast for the current year and 2027.

Market reaction was swift: the company’s shares plunged up to 18 % on Wednesday morning, later recovering to sit about 13 % lower, making Berkeley the worst performer on the FTSE 100 that day.

Berkeley’s statement noted that early‑2026 sales showed modest recovery, but “recent geopolitical events and the macro‑economic consequences, including reduced potential for further rate cuts, could reduce confidence in a near‑term market recovery.”

The firm cited “unprecedented” increases in costs and regulation, alongside weak buyer demand, as reasons for halting land purchases, arguing it can no longer achieve a sufficient rate of return on new sites due to a continuous rise in tax and regulatory burdens.

These challenges arrive as the UK government pushes to meet ambitious new‑home building targets, while the sector grapples with higher taxation, new building‑safety rules, and longer planning timelines—Berkeley estimates approvals now take about 12 months longer than before.

The ongoing war in Iran has amplified inflation fears, lifted mortgage rates above 5 % and heightened mortgage‑cost pressures for consumers, according to Moneyfacts data.

Competitors such as Barratt, Redrow and Persimmon have also suffered, each losing more than 20 % of their market value, underscoring the broader stress across the housing‑construction industry.

Berkeley, headquartered in Surrey, employs over 2,500 people and focuses on brownfield regeneration projects. It holds land sufficient for 50,000 homes with an additional pipeline for 10,000 homes in London and the south‑east, but will slow construction on existing sites to match market demand and regulator approvals.