London house builder Berkeley Group has applied the brakes to production of modular homes from its new factory at Northfleet, Kent.
The firm this morning said it noted "the decision of other parties to exit the industry due to the costs and efficiency impact of regulatory and planning uncertainty on a stable production pipeline."
Announcing a rise in profits for the wide group, Rob Perrins, chief executive, said: "Berkeley's immediate focus is on evolving the product to remove cost, weight and complexity while continuing to work with the numerous statutory bodies to achieve the various regulatory approvals required for efficient future delivery.
"We will not be putting the factory into full production until this is achieved."
The firm said that its testbed application of Berkeley Modular's first modules for the urban house at Kidbrooke Village was now complete with all 96 modules installed on-site.
Pre-tax profit at Berkeley Group rose 9% to £604m in the year to April. Perrins said this was a very strong performance by our sales and construction teams, given market conditions and changing building regulations.
But he warned that due to market conditions and fewer off plan transactions sales in the year ahead would be down 20% compared to 2022/23.
On construction inflation, he said Berkeley was seeing improved competition in the supply chain, especially on larger packages, and anticipated build cost inflation falling to negligible levels by the end of the year.
"We are seeing signs of some financial distress in the supply chain as contractors continue to deal with the tail of impacts from Brexit, the pandemic and the ongoing conflict in Ukraine, as well as the current economic backdrop.
"We are actively working with and supporting our established supply chain partners to ensure sustainability of the supply chain and delivery on our development sites."
Original source: Berkeley backpedals on modular factory production | Construction Enquirer News
