SHARE OF THE WEEK: Housebuilder Berkeley set to reports half-year results

Are high mortgage costs easing? Will buyer activity pick up in the housing market? What is the outlook for next year?

Investors will be hoping Berkeley Group can at least answer these questions when the housebuilder reports its half-year results next Friday.

Momentum seems to be heading in the right direction.

Berkeley’s shares are up by a quarter this year, house prices have risen for the third month in a row, according to Nationwide, and financial markets are betting that interest rates have peaked and could be cut in 2024.

Analysts will be keen to see whether Berkeley remains on track to make £1.05billion of profits over the next two years.

In its last update, the builder said profits should be evenly split across the first and second half. Any signs that sales, which slumped 35 per cent in the first four months, are improving should land well with investors.

Speaking of land, Berkeley in September said soaring inflation and higher interest rates were impacting investment into brownfield regeneration.

And analysts at Jefferies do not expect Berkeley to have bought any new sites.

‘While we believe there have been some improvements through September and October, we think Berkeley will talk of a tough trading environment,’ they added.

The City will also keep a close eye on how many homes it has built and the average selling price. And Berkeley hopes to return £283m to investors by September next year through share buybacks and dividends.

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