Berkeley Group Share Price (BKG)

Agreed and very well put. Sales are key to this share recovering and leasehold customer confidence is key. The reputation of some of these management companies for transparent and fair charges reflects badly on Berkeley. Good properties and good brand but they need to tackle this issue to get sales revenue on track.

Berkeley’s problem is not just a weak housing market. In my view, it is becoming a full-blown confidence issue caused by the total cost of ownership.

Buyers are already stretched by high mortgage rates, affordability checks, and uncertainty around property values. On top of that, Berkeley customers are facing rising ground rents, inflated service charges, poor value from managing agents, and the looming threat of leasehold reform. That is a toxic mix for new-build flats.

The reality is simple: no sensible buyer wants to pay premium prices for a Berkeley flat and then be trapped in an open-ended service charge liability. Once annual service charges start approaching levels that lenders dislike, resale values suffer, buyers hesitate, and the whole investment case weakens.

Berkeley cannot keep blaming the market while ignoring the cost structure attached to its own developments. If service charges are excessive, if ground rents are rising, and if managing agents are delivering poor value, then Berkeley’s brand is being damaged from the inside.

In my view, Berkeley needs to take direct control of estate management immediately. Bring it in-house, remove unnecessary middlemen, apply proper procurement discipline, and use the same cost-control mindset that made Berkeley successful as a developer. It should then give buyers and existing leaseholders a serious commitment: combined annual service charge and ground rent should not exceed 0.5% of the property value, with no aggressive increases for at least 10 years.

Without this, Berkeley risks creating developments that look premium on launch but become financially unattractive after completion. That is disastrous for confidence, resale values, and future sales.

At the moment, managing agents are not just annoying residents, they are actively damaging Berkeley’s sales pipeline and investment case. Until Berkeley takes ownership of customer costs, the company risks being dragged into a downward spiral of weaker sales, angry leaseholders, poor resale sentiment, and reduced buyer trust.

BKL is buying back shares whilst ex CEO/Chairman sells down his bonus shares. Savills, in The Times today, London and SE house prices dropping by 4%. Major short selling continues.

https://www.thetimes.com/article/588c4a41-a44d-4fa7-b4c3-cf53099759ce?shareToken=7127ebd16ae55651724feaac9e481b75

.wealthoracle.co.uk/companies/BKG

Berkeley Group’s strategy update reflects a clear shift from growth through land acquisition toward value extraction, capital discipline and balance sheet resilience. The group expects to deliver FY26 pre-tax profit of £450m and end the year with around £300m of net cash, which is a solid outcome given the difficult backdrop. However, the more important message is that management is now explicitly adapting the model to a more constrained housing market, shaped by higher build costs, rising regulation, planning delays, elevated interest rates and weaker consumer confidence. The core of the investment case remains the value embedded in Berkeley’s existing land bank. The group already controls land for over 50,000 homes, with a further pipeline of more than 10,000, concentrated in London and the South East...

.wealthoracle.co.uk/companies/BKG

I buy at £9 .