Berkeley Group (LON:BKG) shrugged off recent government changes to buy-to-let taxes and vowed to increase dividend payments by an additional 26% over the next six years.
The London and south-east focused house builder said fundamentals for the housing sector were very strong across the region with a substantial housing shortage evident.
Berkeley sold 2,091 homes at an average selling price of £506,000 in the half year to September.
Cancellation rates of around 10% were up to half historic norms while completed stock was also at historically low levels, it added.
Chancellor George Osborne cut tax breaks for landlords and raised stamp duty on second homes in his Autumn Statement, but Rob Perrins, Berkeley’s managing director, said “London remains a destination of choice which it must cherish.”
Perrins said the visibility over future profitability and cash generation from its land bank and forward sales, mean the 2021 dividend return target could be raised from £13 per share to £16.34.
“With £4.34 per share having already been paid, the remaining £12 per share is planned to be paid in annual dividends of £2 per share over the next six years.”
Interim profits fell by 4% to £293mln including ground rent sales, though on an underlying basis were 23% higher at £242mln.
Shares rose 7% to 3,591p.