Berkeley to return £1bn to shareholders as housing market confidence picks up

Housebuilder Berkeley, whose chairman Tony Pidgley is famed for his ability to call the market, on Wednesday signalled confidence in London with plans to nearly double investor returns to £1 billion.

The FTSE 100 firm said it will return about £500 million to shareholders in March and the same amount a year later.

That is an increase of £455 million from previous plans and will come via share buybacks or dividends.

Berkeley gave the update alongside saying it will boost production of new homes significantly over the next six years.

Investors cheered the update, sending the shares up 282p, or 5.4%, to 5468p.

A number of housebuilders have warned of buyer jitters since Britain voted to leave the EU. Berkeley today said it has been “mindful of the volatile operating environment”, and been cautious with its investments since 2016.

But it added that progress made with new development sites, and its assessment of the “prevailing operating environment” contributed to its latest payout decision.

A host of builders and estate agents have reported rising demand for homes and increased buyer confidence since Boris Johnson’s election victory last month.

On Berkeley, Canaccord Genuity’s Aynsley Lammin said: “The increase in the capital returns over the next two years would seem to be a result of the improved confidence post the election and its financial and operational confidence to deliver its profit guidance.”