Barratt profits jump as their typical house price rises to £194,000

Barratt Developments hasn't just seen pre-tax profits jump (up from £100m to £104.8m in the year ended 30 June) but average selling prices too (release).

Some solid numbers, and dividend payments are set to recommence (not new information). On that basis, CS are calling Barratt up one to two per cent on the open.

A typical house will now set you back £194,800 - up nearly eight per cent from last year. Private average selling prices increased by six per cent in the same period, to £213,900.

Barratt reported a very strong start to the financial year, as the average net private reservation per week per active site rose by 29.4 per cent.

This seems to result from a large boost from government intervention, as the first stage of Osborne's Help to Buy scheme kicks in:

Help to Buy has been used in 29.0% of total reservations. Net pricing has firmed in the financial year to date as we have been able to reduce our sales incentives compared to the same period last year by approximately 150 to 200 basis points.

Joe Rundle, head of trading, ETX Capital:

We saw the solid RICs UK housing market survey yesterday which instilled even further confidence in the outlook for the UK’s housing market. Most notably, it appears to be the general optimism surrounding the recovery in London and South East areas which have boosted confidence in Barratt’s ability to bring in hefty profits in 2014.

Mark Clare, chief executive, commented:

We have already increased our completion volumes by over 20% in the past two years and expect to deliver around 45,000 new homes over the next three years.