Help to Buy expected to push Barratt's profits to top end of expectations

Housebuilding company Barratt Developments thinks its full year profits will be better than expected thanks to improved mortgage availability and the Help to Buy scheme boosting sales (release).

The firm says it has seen improved market conditions across all six of the UK regions it operates in, with London and the South East showing the strongest trends. Sales increased 17.9 per cent in the second half of 2013 compared to the year before, and by 34.7 per cent since the launch of Help to Buy in April.

It now expects full year pre-tax profits and exceptional items to come in at the top end of analysts’ expectations around £192m. It also estimates its operating margin will increase around 10.4 per cent in the second half and 9.7 per cent for the full year – up from 8.2 per cent in the prior full year.

The average selling price increased by around nine per cent in the second half to £221,000.

Group chief executive Mark Clare said:

As more house buyers return to the market, supported by improved mortgage availability and the Help to Buy scheme, we are in a strong position to continue to grow the value of the business. We are increasing our investment in land whilst reducing debt and have delivered a performance ahead of expectations. Momentum is continuing to build and with forward sales up substantially, we are confident we can improve our performance still further in the year ahead.