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Barratt warns Help to Buy withdrawal may stifle demand as it ramps up completions

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  • 09/02/2022
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Barratt warns Help to Buy withdrawal may stifle demand as it ramps up completions
Barratt Developments has said the withdrawal of the Help to Buy scheme next March could impact the level of reservations for its homes by autumn, alongside other industry and wider economic uncertainties.

 

Barratt also cited unpredictable housing demand and mortgage availability as potential risks to business. It said changes in the UK and European macroeconomic environments could “lead to falling demand or tightened mortgage availability” and reduce the affordability of its homes. 

However, it said the overall strength of the housing market, its operational performance and the ongoing need for new homes to be built would provide Barratt with the ability to react to changes and opportunities. 

Stating it was on track to deliver up to 18,250 homes this year, the developer’s interim results for the six months to 31 December 2021 showed this was above the total home completions delivered in 2019. 

During the latter half of 2021, Barratt completed 8,067 homes which was an 11 per cent decline on the same period the year before. It said this reflected the “unusually high” level of completions following the Covid lockdown. 

 

Mortgage development

The developer said it was also engaging with mortgage lenders to create green products, such as the green mortgage pilot product it launched with Halifax in December for homes in Scotland. 

The pilot offers borrowers an increased mortgage loan size based on improved affordability through reduced home running costs. 

It added: “We will be working with mortgage lenders in the months ahead to see how we can help create more competitive and attractive mortgage products for our customers, reflecting the efficiency advantages created by our homes.” 

Barratt also said the Deposit Unlock scheme was giving its homebuyers access to high loan to value lending. 

The developer said it was “continually striving” to improve the energy efficiency and sustainability of its homes. It said for the year to 31 June 2021, 99 per cent of its home completions were rated EPC B or above. 

The firm reported a profit before tax of £432.6m, up 0.6 per cent on the same period in the previous year. 

David Thomas, chief executive of Barratt Developments, said: “We have delivered an excellent first half and the strong rebound in our construction activity means that we now expect to complete more than 18,000 homes, including 750 from joint ventures, this year, ahead of previous expectations and pre-Covid levels.  

“This increase in construction activity has not affected our focus on our customers, on quality and service and on acting in a responsible and ethical way. We continue to work hard to lead the industry in building the high quality sustainable homes and developments the country needs.” 

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