Berkeley Earnings: UK Housing Market Conditions Are Firming, With Inflection Point in Sight

No-moat Berkeley Group remains on track to deliver against its fiscal 2025 guidance, delivering GBP 275 million in pretax profit in the first six months of the fiscal year. Berkeley asserts that an inflection point in housing market conditions is near, reporting firming forward sales activity in recent weeks. Its comments accord with recent trends in leading housing market indicators and the sales performance of its homebuilder peers, all of which suggest the UK housing market is in the early stages of cyclical recovery. We make no change to our financial estimates or our GBX 5,080 fair value estimate; the shares are screening appealingly following recent stock price weakness. Nonetheless, we continue to see greater value elsewhere in our UK homebuilder coverage, with no-moat Persimmon our preferred exposure to profit from the ongoing UK housing market recovery.