Barratt Developments PLC delivered a positive trading update today predicting its highest number of completions in nine years by year end on 30 June 2017.
Profit before tax is expected to be at the top of the range of current analyst estimates despite the triggering of Article 50 (formally kick-starting the Brexit process) and the General Election, while its sales rate was also improved on last year. In fact, total forward sales were at record levels as of 7 May 2017, up 12.7% on last year.
The housebuilder noted that increased competition within the mortgage market had resulted in wide availability of attractive mortgage finance which, alongside Help to Buy, continued to support the very strong consumer demand.
According to Barratt, this strong demand had helped drive volumes and would result in 17,350 total completions, its highest total in nine years. Barratt also continued to see upward momentum on average selling prices.
Commenting, Barratt’s Chief Executive, David Thomas, said: “This has been another strong period both operationally and financially for the Group. Our controlled approach to growth means we are on track to deliver 17,350 completions in the year, the highest number of completions in nine years. This, combined with the strong market backdrop, means we now expect full year profit before tax to be at the top of the range of current analyst estimates.”
Barratt’s positive statement on the new-build market appears to contradict statements made on the wider market by Martin Ellis, Halifax housing economist, who said: “Housing demand appears to have been curbed in recent months due to the deterioration in housing affordability caused by a sustained period of rapid house price growth during 2014-16.”
Halifax recently reported that house prices fell by 0.2% in the three months to April – the first quarterly fall since November 2012.
We know there is always demand if the price is affordable. Our micro-apartments start at £287,950 in London and £130,000 in Manchester. Call the sales team on 020 8688 6552 to enquire.