One of Britain’s biggest housebuilders has stopped buying land on which to build new homes due to the ‘considerable uncertainty’ gripping the economy and complex planning rules.

Berkeley Group, which operates across London and the south-east, said it did not invest in any new sites between May and August, due to high interest rates and inflation and ongoing issues with the planning system.

Soaring interest rates have driven up mortgage costs for potential buyers while high inflation is putting pressure on household budgets. Meanwhile, the complexity of the UK’s planning system and a lack of clarity around regulatory changes that will affect the housebuilding sector is also squeezing investment, Berkeley told shareholders.

The update came as the Home Builders Federation accused ministers of being ‘increasingly anti-development’ after ‘capitulation to the Nimby lobby’. Berkeley said it will ‘only invest very selectively in new opportunities’ to acquire sites for new projects.

‘The complexity and protracted nature of the current planning system and lack of clarity surrounding certain regulatory changes affecting our sector, at a time of considerable uncertainty for the UK economy with persistent high inflation and interest rates, continues to deter investment into brownfield regeneration and the wider housebuilding sector,’ the company said in a trading update for the four months to the end of August. 

Uncertainty: Berkeley Group said it did not invest in any new sites between May and August

The FTSE 100 property firm said sales over the four months were 35 per cent below the same period last year. However, it said pricing remains resilient due to a reduced supply of homes coming on to the market.

Richard Hunter, head of markets at Interactive Investor, said: ‘Berkeley Group continues to fine-tune its operations against a notoriously difficult backdrop for the sector.

‘In some ways, Berkeley is a different beast to many of its competitors, with a potential edge coming from its mix of an exposure to London and the south-east, higher-end properties and the regeneration of brownfield sites in which it is well accomplished. The group has also reined back its land acquisition, making no purchases in this period and with the intention of only investing very selectively in new opportunities.’

Rival developers have issued downbeat updates over the summer, with Persimmon, which will this month drop out of the FTSE 100, Barratt Developments and Taylor Wimpey all building fewer homes.

Barratt said this week it has implemented a hiring freeze, reducing its headcount by 6 per cent, following the market slowdown sparked by Liz Truss’ mini-budget last year. Hunter added: ‘Berkeley is far from being immune to the wider issues of mortgage availability and affordability, planning bottlenecks, uncertain consumer propensity to buy and a cloudy outlook.’

Despite the economic uncertainty, Berkeley confirmed it expects to meet a pre-tax profit forecast of at least £1.05billion in the current and next financial years.

Berkeley said it expects forward sales of around £2billion at the end of October, compared to £2.14billion at the end of April.

The developer confirmed it has paid shareholders a dividend of 59.3p per share, totalling £63.1m, and is on track to deliver returns of £282.7m by September next year.

A special purpose acquisition company has launched a new listed business providing investors access to the Lloyd’s of London Insurance market. 

Financials Acquisition revealed it had set up London Innovation Underwriters (LIU), with which it intends to merge in order to raise significant amounts of capital via a listing on the UK capital’s stock exchange.

It believes the combination would create an ‘efficient vehicle’ enabling investors to build exposure to the market without needing to fork out goodwill payments or create additional fee structures.

Fined: Financials Acquisition revealed it had set up London Innovation Underwriters (LIU), a vehicle intended to give investors to access the Lloyd’s of London insurance market

LIU plans to access the Lloyd’s insurance marketplace through London Bridge 2, a platform that makes it easier for participants to deal with insurance-linked securities investors.

Financials said it expects LIU to have enough capital to support up to £1billion of capacity upon completion of the merger.

SPACs are blank-check firms formed specifically to raise capital through an initial public offering with the intention of buying another company.

They boomed during the height of the Covid-19 pandemic, especially in the US, as businesses sought a way to go public in a faster and cheaper way.

However, their popularity began to plunge in 2022 following a spate of high-profile bankruptcies, as well as rising interest rates and economic uncertainty.

Will Allen, chief executive and co-founder of Financials Acquisition, said: ‘We believe LIU will offer a unique opportunity for investors to gain efficient access and diversified exposure to the Lloyd’s market with liquidity.

‘We are pleased with the initial reaction we have received from both investors and underwriters and look forward to the next stage of the transaction.’

Allen, an ex-managing director of investment bank KBW, set up Financials last year with former Munich Re executive Andy Rear through a partnership vehicle called Finsac.

Financials’ announcement comes a day after Lloyd’s declared a pre-tax profit of £3.9billion for the first six months of 2023, having made a £1.8billion loss in the same period last year.

Earnings were driven by solid investment returns and underwriting profits more than doubling to £2.5billion, thanks to a decline in large loss events.

Gross written premiums jumped by 22 per cent to £29.3billion due to rising prices and growth from both new and existing syndicates.

John O’Neal, chief executive of Lloyd’s, said the results ‘show we are now driving consistent improvement in profitability and an ability to grow sustainably. This performance puts us in a strong position for the second half of the year.’

Britain has again outmuscled rivals to be named Europe’s most attractive destination for overseas financial services investment.

The UK attracted 76 financial services projects in 2022, well ahead of nearest competitor France on 45, as it shrugged off post-Brexit attempts to steal its crown, according to an EY report.

It comes amid concerns about how to restore the City’s pre-eminence as a global listing destination after a series of firms switched to the US.

There are also fresh fears that Britain’s ‘punitive’ tax regime is not helping.

Anna Anthony, UK financial services managing partner at EY, said: ‘The strength of the UK financial market has meant that, even through challenging times, investors see it as the most attractive European financial services market.

Attractive destination: The UK attracted 76 financial services projects in 2022, well ahead of nearest competitor France on 45

‘Our research shows that investors recognise the strength, gold-standard governance and resilience of the UK’s financial system and see it as the preferred destination for growth, innovation and access to top talent.’

The figures cover the number of financial services projects over the year, in which an overseas firm makes an investment by setting up a new operation or expanding an existing one.

In the past decade, the UK has consistently outmuscled European rivals, totting up 819 projects, ahead of France and Germany combined.

It comes amid growing fears over the City’s future. Cambridge-based chip designer Arm’s decision to list in New York came as a blow. A Swedish-led takeover of veterinary drugs maker Dechra added to a string of firms leaving London.

Xavier Rolet, ex-chief executive of London Stock Exchange, said reforms threatened to be a sideshow without changes to a ‘punitive fiscal and regulatory framework’. He told The Sunday Telegraph: ‘We need a recalibration. We have to lower the quadruple taxation of equities in the UK.

‘We have dividend tax, capital gains tax, income tax and a transaction tax via stamp duty, of which the UK has the highest rate in all of Europe. The same pound of income from equities is taxed four times.

‘You have a regulatory framework that forces long-term investors… to effectively short the real economy by preventing them from investing in the stock market.’