Flood of overseas buyers helps Berkeley beat City forecasts

The group said its focus on properties in London and the south-east of England had buoyed sales during the downturn, as equity-rich foreign investors were lured by attractive pricing and a weak pound.

Unveiling better-than- expected annual results, Berkeley managing director Rob Perrins said the firm had also benefited from the build-up to the 2012 Olympics and welcomed the change of government at Westminster.

"Our location helps a lot; London has got the Olympics coming, it's got the business sector," he said. "Everyone thought businesses would relocate, but the coalition is a lot more business-friendly. That's a very good start for us."

Perrins noted that 30 per cent of investors are now from outside the UK, compared with the historic level of 12 per cent.

Results for the year to 30 April show the group generated a pre-tax profit of 110.3 million, down 8.4 per cent on a year earlier but ahead of City estimates ranging from 97.8m to 108.5m. Revenue fell 12 per cent to 615m.

Berkeley said the housing market in and around London had stabilised while sales prices were ahead of targets set a year earlier. The group – based in Cobham, Surrey – also has urban developments outside the UK capital, including Portsmouth's 200m regeneration project at Gunwharf Quays, though none north of the Border.

Berkeley will not pay a dividend despite its strong cash position, choosing to focus on land investment which it is aiming to grow by 10 per cent this year.

Robin Hardy, an analyst at brokerage KBC Peel Hunt, said: "Some had expected a 10p dividend to be made . We do expect Berkeley to hand potentially sizeable sums back to shareholders across the next five years."

Housebuilders have breathed a collective sigh of relief after the coalition government's emergency Budget unveiled no nasty surprises for the sector. But builders are not out of the doldrums yet as fears of further macroeconomic gloom and rising unemployment stunts optimism.