Barratt ramps up house building

Aaron Morby 8 years ago
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Britain’s biggest house builder has started to crank up building rates after raising completions by almost a fifth in the past six months.

In a first-half trading update to the end of December, Barratt said it was on course for strong growth in profits from improved margins and sales volumes.

Barratt reported a 19% increase in housing completions to 6,195 and private reservations up 37% on last year.

The picture for affordable completions was less rosy with completions down 11% to 751 homes.

Barratt boss Mark Clare said that improved market conditions and stronger consumer demand had helped underlying sales prices, largely in the form of reduced incentives.

Barratt’s private average selling price rose 11.4% to £225,000.

Help to Buy scheme continued to have a positive impact on demand, with 29% of total completions in the scheme.

Clare said: “As a result of the continued recovery of the housing market across all regions and our £3.1bn investment in new land over the last four years, we have been able to increase materially the number of new homes being built and our profitability.

“Our disciplined approach to running the business is delivering significant improvements across all key financial metrics and with forward sales of over £1.2bn, we are well placed for FY14 and beyond.”

Barratt also expanded its land bank with 11,394 plots and said it continued to achieve minimum hurdle rates of a 20% gross margin and 25% return on capital employed, assuming no future house price inflation.

In the South East and London where the market is more competitive, Barratt has focused on acquiring land from the public sector and sites, which are larger or more technically complex.

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