Berkeley Group warns Middle East conflicts may deepen UK housing crisis
Berkeley Group has warned that ongoing conflicts in the Middle East could worsen conditions in the housing market. The developer remains cautiously optimistic about London's property sector in the long run, despite recent price drops and economic uncertainty. Its shares fell by 2.82% on Friday morning as investors reacted to the latest financial outlook.
The company reported that trading has been constrained since November 2025 due to geopolitical tensions and broader economic instability. However, sales enquiries have remained steady, with reservation levels recovering to near those seen before the pre-Budget period last autumn. Berkeley Group still expects an annual pre-tax profit of £450 million for the year ending in April and aims to maintain a net cash position of around £300 million.
The escalation of the Iran conflict since 28 February 2026 has disrupted global oil supplies, driving Brent crude prices from around $72 to over $120 per barrel. The closure of the Strait of Hormuz has blocked about one-fifth of the world's oil, causing production cuts in Iraq and Kuwait. Energy costs have surged, with US gasoline up 19% to $3.54 per gallon and Swiss heating oil rising by 30-40%. Supply chains remain severely disrupted, pushing up inflation and forcing mortgage rates higher.
As a result, the typical two-year fixed-rate mortgage has now climbed above 5% for the first time since last summer. Berkeley Group has cautioned that prolonged inflation and elevated interest rates could squeeze household budgets further, potentially leading to higher living costs for customers.
The developer is preparing for a period of higher inflation and prolonged economic pressure. With energy prices and mortgage rates rising, the housing market faces further challenges in the coming months. Berkeley Group continues to monitor the situation closely while maintaining its financial targets.
Read also:
- American teenagers taking up farming roles previously filled by immigrants, a concept revisited from 1965's labor market shift.
- Weekly affairs in the German Federal Parliament (Bundestag)
- Landslide claims seven lives, injures six individuals while they work to restore a water channel in the northern region of Pakistan
- Escalating conflict in Sudan has prompted the United Nations to announce a critical gender crisis, highlighting the disproportionate impact of the ongoing violence on women and girls.
