Barratt reports highest level of completions in nine years

In its first half results for the six months to December the company said it had sold 6,813 units in the period, up 0.4% on the 6,784 completed in the first half of the 2015 financial year, including joint ventures. Regions performing particularly well were Scotland, the north of England, the North West and the West Midlands.

London, however, was a different story, were sales were down 56% to 367 units. The company said this was in line with its planned build programme, and that it expected “a significant increase” in completions on wholly-owned sites in the second half.

It had further supplemented private sales in London with a build and sale agreement on a bespoke £47m development of 39 apartments, completion of a 54 apartment sale in Fulham and Aldgate and a build and sale agreement for 118 apartments at Nine Elms, it added.

Barratt’s profits before tax for the period amounted to £321m, up 8.8% on 2015. The firm’s outlook for the future is equally positive after posting a record total forward sales of £3bn, up 17% on last year.

Chief executive David Thomas said: “As we reported in the January trading update, we have delivered another very strong first half performance, pre-tax profits were up nearly 9% and completions outside of London at their highest level in nine years.

“Whilst we have increased volumes across the UK by 55% in the last five financial years, we have maintained our commitment to build quality and customer service.

“With a record forward order book, strong consumer demand and a positive lending backdrop, we remain confident in our outlook for the full year.”

Affordable homes

Barratt’s net private reservation rate was 0.68 (2015: 0.66) per active outlet per week in the half year period. The firm operated from an average of 374 outlets and launched 83 new developments (2015: 63).

According to Barratt the fundamentals of the market remained robust. The firm observed strong demand supported by good mortgage availability. It also welcomed “supportive” government policy, in particular the recent publication of its housing white paper, which, it said, “will allow a full debate on addressing the country’s housing needs”.

To this end, Barratt said it was committed to building more quality homes. Of the completions achieved in H1 2016, 1,221 were classed affordable, while 5,561 were private and 398 were joint ventures. The share of affordable homes was up 9.6% on the previous year.

The firm said: “As the demand for housing remains strong, we have continued our disciplined investment to increase housing production, with £5bn approved for the purchase of over 94,000 plots of land over the last five years.

“Additionally, over the last five years we have built more than 77,100 homes of which more than 13,800 were affordable homes sold to registered providers.

“There remains a long-term housing shortage of all tenures that can be addressed through additional supply in the right locations. We are committed to playing a leading role in addressing this issue.”