Barratt beats forecasts but warns of dip

City A.M. Reporter
HOUSEBUILDER Barratt Developments said concerns about the economy and the lack of mortgage finance meant the market for new housing was still challenging as it reported better-than-expected full-year profits.

“It’s early days in the autumn-selling season but so far private reservation rates are in line with expectations and prices are holding up,” chief executive Mark Clare said.

House prices fell much faster than expected last month, according to a monthly survey from mortgage lender Nationwide, stoking concerns the UK may be heading for a double-dip recession.

Barratt, which is building more houses rather than flats at present, said it would continue to focus on prices rather than volume and would not reinstate dividends, unlike rivals Bovis and Persimmon.

For the year to the end of June, Barratt reported an operating profit of £90.1m, up from £34.2m one year ago. Barratt had said in July it would report an operating profit of at least £85m for the year thanks to a strong second-half performance.

Clare said the year had also seen a fall in the proportion of investors buying homes, with sales at 10 per cent from 25 per cent previously.

Also yesterday, Berkeley Group, which differs from Barratt in that it primarily develops upmarket apartments in London, said it was seeing strong interest from international buyers looking to invest in the capital.