Gloom hinders Barratt sales

City A.M. Reporter
BUILDER Barratt Developments yesterday reported an autumn slowdown in reservations, as an uncertain economic environment and limited mortgage availability continued to weigh on consumer sentiment.

Net reservations per active sales site stood at 0.45 compared with 0.55 a year ago as homebuyers took longer to commit to buying ahead of a government announcement on spending cuts in October, Barratt said.

Britain’s fourth largest housebuilder by market value echoed its peers in saying a lack of mortgage lending was obstructing a recovery of the housing market. “Access to mortgage finance remains the single biggest issue for the industry,” said chief executive Mark Clare.

A sharp drop in mortgage availability from banks rebuilding their balance sheets has crimped demand for homes in Britain, with analysts expecting transaction activity to remain flat for the foreseeable future.

Net debt nudged up to £575m during the period, as the company spent £220m buying around 4,500 land plots. The total average selling price on completions rose nine per cent to £180,000.

Clare said new build homes represented a relatively small part of the wider house sales market, and the group was focussing on achieving high margins from its land plots.