Sunday share tips: Berkeley, Zoopla Property

Sell shares in Berkeley Group, Questor wrote in the Sunday Telegraph, as the London-focused housebuilder looks past its best. A peak of £35 this summer has seen 10% subsidence since as pressure is put on profit margins by rising costs of skilled building workers and building materials. While sales and cash levels were increasing respectably, interim results next Friday are likely to show a slowdown with revenue and profit down by double-digits.

The second half of the year could see demand weaken as the Chancellor's extra 3% stamp duty on buy-to-let property and gain tax on overseas buyers. The stock still offer a very attractive dividend yield around 5%, but the share price could sink further under various pressures, including rising interest rates next year. Taking some profits would be a prudent move.

Reports of the death of Zoopla Property Group, the residential property website, are greatly exaggerated suggested the Sunday Times' Inside the City column. Although the rise of OnTheMarket.com, set up by estate agents, has taken a chunk of its business due to its rule that houses can only be listed on one other of Zoopla and rival Rightmove.com, not all three. The exodus appears to have slowed and OTM only gets an eighth of Zoopla's visitors.

And the impact forced Zoopla to diversify with the acquisition of uSwitch, the price comparison site, which is helping mitigate the profit slowdown. However, final results this Wednesday are still likely to show growth in profits of 15% on sales up 33%, not at fast as last year but with uSwitch Zoopla is better balanced. A p/e ratio of more than 18 is punchy, but there more room to expand.

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