hiring employees: Berkeley, one of the largest housebuilders in Britain, has announced it will cease acquiring new land and hiring new employees. This decision comes as the company grapples with the impact of the ongoing war in Iran on the property market.
hiring employees: what to know
Cost-Cutting Measures
The London-focused housebuilder stated it would implement cost-cutting measures due to “geopolitical volatility” and a reduced potential for interest rate cuts, which could negatively affect its business. As part of these measures, Berkeley will also employ fewer subcontractors.
In its latest forecast, the company expects to report over £1.4 billion in pre-tax profit from 2027 to 2030. This is a significant increase compared to an earlier forecast of approximately £450 million for this year and in 2027.
Impact of Geopolitical Events
Shares in Berkeley fell as much as 18% on Wednesday morning, making it the worst performer on the FTSE 100 index. They later recovered slightly, closing down nearly 13%. The company noted that while it had seen signs of a modest recovery in sales volumes in early 2026, recent geopolitical events have dampened confidence in a near-term market recovery.
Berkeley cited “unprecedented” increases in costs and regulations, along with weak demand from buyers, as reasons for halting land acquisitions. The company indicated that it no longer believes it can achieve a sufficient rate of return on new land due to a “continuous increase in the tax and regulatory burden on residential development.”
Challenges in the Property Market
The property market is facing significant challenges, particularly as the UK government aims to meet ambitious housing targets. Industry leaders have expressed concerns about the impact of higher taxation and new building safety regulations on development timelines. Berkeley noted that the new regulatory processes have extended the time between obtaining planning approval and starting construction by approximately 12 months.
Additionally, the war in Iran has heightened fears of inflation, elevated interest rates, and increased mortgage costs. Average mortgage rates in the UK have surpassed 5% since the conflict began, according to data from Moneyfacts.
Berkeley, headquartered in Surrey, employs over 2,500 people and focuses on developing brownfield regeneration projects in urban areas. The company currently has enough land for 50,000 homes, with an additional pipeline for another 10,000 homes in London and the south-east. It plans to slow the pace of construction on existing sites to align with market demand and regulatory approvals.