The Berkeley Group is on target to deliver pre-tax profits of £2 billion in aggregate by 2018, despite uncertainty over the EU referendum causing a 20% drop in new home reservations.

In its preliminary results, the house builder reported its forward sales increased to £3.25bn from £2.95bn in April last year.

In addition, the company sold 3,776 new homes (2015: 3,355) across London and the South of England at an average selling price of £515,000 (2015: £575,000).

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It stated the decline in selling price was due to the company completing two students developments in both Bath and London, comprising of 638 units.

Chief Executive, Rob Perrins, said: "The housing market in London and the South East continues to have strong underlying fundamentals with an imbalance between demand and supply, a persistent low interest rate environment and high employment levels, notwithstanding recent unhelpful changes to property taxation.

"The short-term outlook is impacted by uncertainty whether it be global in nature or through the economic consequences of the outcome of the EU Referendum."

(LM/MH)