Berkeley plays down crash fears

UPMARKET housing developer and builder Berkeley has played down fears that the house market is heading for a crash. The company, which focuses on London and the south east, raised full-year profits 16% to £196.2m, as low interest rates fuelled the booming housing market.

'Berkeley's forward position is immensely strong,' added chairman Roger Lewis. It raised the total dividend to 16.5p a share from 14.9p last time.

Unit sales rose to 3,182 from 2,440, but the average price fell £12,000 to £273,000. Lewis said prices slid in the three months after 11 September but that demand had picked up and prices had risen through to the end of May.

Lewis said low interest rates meant affordability was still good and that there was still a severe shortage of new homes. 'We might experience an easing or correction in the market which we would welcome, but we do not expect a major downturn,' he added.