Barratt Developments highlight more positive news for UK housebuilders
All of Barratt Development’s operational sites have reopened as of 30 June, and the group is experiencing a high level of interest from customers.
The group has taken 0.63 private reservations per active outlet per week in the last six weeks, compared with 0.69 in the same period last year. Pricing has remained broadly stable.
In the year ending 30 June Barratt completed on 12,604 homes including joint ventures, compared with 17,856 last year. The group attributes the decline to the lockdown. The forward order book stands at 14,326 homes with a value of £3.2bn, compared with 11,419 homes valued at £2.6bn at the same point last year.
The shares rose 6.2% following the announcement.
William Ryder, Equity Analyst at Hargreaves Lansdown comments: “Once again, a housebuilder is reporting stable pricing and recovering volumes now the lockdown has lifted. This is undeniably good news for the sector and the economy, but it is tempered slightly by the lack of mortgage availability at higher LTVs. We hope lending recovers with the economy, but Barratt is also calling for the government to extend its help to buy scheme.
“However, there are a lot of demands on the nation’s pocketbook at the moment – and help to buy may not come top of the list. Also weighing slightly on sentiment is Nationwide’s house price index, which showed a year on year fall in June for the first time since 2012.
“The economy looks like it could go either way at the moment, and house prices and housebuilders are sure to follow it. The next few months are crucial for Barratt because, while the group demonstrated its strength during the lockdown, an extended recession would prove an even tougher test.”