Bad autumn hits Barratt’s forward private sales

Aaron Morby 13 years ago

Forward sales of Barratt’s private homes have fallen by nearly a quarter compared to last year.

A trading update said 2,528 private homes have been sold for the coming year, compared to 3,336 the same time a year ago.

A lot of the shortfall has been made up by stronger sales in social housing bringing total forward sales in line with last year at £871m.

Barratt also confirmed there had been an autumn slowdown in house reservations as economic uncertainty continues to weigh on buyers.

But Britain’s fourth-largest house builder by market value said the total average selling price on completions rose 9% to 180,000 in the period from July 1 to November 14.

Chief executive Mark Clare said: “Our strategy continues to be value and quality focused in a market where customers are taking longer to commit to house purchases.

“While the autumn selling season has been weaker than anticipated, our encouraging performance on price is expected to drive margin growth for the year.”

During the trading period, Barratt opened 72 active sites and expects to open a further 120 sites by June 2011. Taking account of expected site closures this will see a net increase of 60 active sites.

But Barratt said weak consumer confidence and a restricted mortgage market would drag on recovery, and forecast limited volume growth in the current financial year.

A sharp drop in mortgage availability as banks rebuild their balance sheets has stifled demand for homes, and analysts now expect house prices to keep falling into next year.

The company said it expected net debt at the year-end to be £575m as it spent money buying land.

Joint venture partnerships continued as a growth area. In October, Barratt’s joint venture partnership with London & Quadrant Housing Trust acquired a site in Alie Street on the edge of the City of London, which will provide 235 residential units.

The builder is shortlisted on 10 developments as a delivery partner for the Housing and Communities Agency and commercial development business Wilson Bowden has signed long term development deals in Basildon and Workingham.

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