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Housing boom boosts Berkeley profits

Berkeley Group has become the latest housebuilder to benefit from the housing boom, recording a 40 per cent jump in profits.Pre-tax profits for the year ending April 30th climbed to £370 million, up from £270.7 million the previous year. Basic earnings per share increased by 38.6 per cent, to 221.8 pence.The firm made 3,742 completions during the year - some 30 per cent more than at the peak of the market in 2007. Its properties had an average selling price of £423,000.Investment of £353 million has been made in nine new construction sites over the past year and this could result in the delivery of 2,500 new homes.Commenting on the results, chairman Tony Pidgley said: "The last year has seen a surge of confidence within the UK economy. "Housebuilders have been at the forefront of the return to growth, creating a feelgood factor which benefits everyone. Their investment has underpinned the delivery of affordable homes and infrastructure for our communities. "This is a result of a stable economic and political environment and strong inward investment."Mr Pidgley added that the capacity of the market has the potential to expand further, underpinned by the government's Help to Buy scheme.Berkeley currently employs 11,000 people on its sites across the country and sustains a further 10,000 jobs in the supply chain.Mr Pidgley added that the prospects for the housing market remain positive as long as interest rate rises and regulation of mortgages are matched by wage rises.Chancellor George Osborne recently gave the Bank of England new powers to limit mortgage lending in order to ensure the booming housing market does not threaten the economic recovery.Berkeley managing director Rob Perrins was critical of the lending restrictions, telling Reuters bringing in new rules would prevent people from buying homes.He suggested the government focus on raising employment levels, as once people are employed they are able to save money to finance their interest payments. 

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