Barratt hits at housing policy

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The Independent Online
FRANK EATON, chairman of Barratt, one of the largest housebuilders in the country, yesterday launched a stinging attack on the Labour Government. He accused Tony Blair, the Prime Minister, of ignoring the needs of first- time buyers by continuing to reduce the level of Miras, the tax relief on mortgage payments.

Mr Eaton said yesterday: "The Government is discriminating against the first-time buyer. If this continues it will force more young people into renting instead of home ownership."

Barratt is calling on Labour to provide more subsidies for first-time buyers. It believes the five interest-rate hikes since Labour came to power will have a particularly damaging effect on less affluent parts of the country.

The company also criticised the current planning system, which it believes is in desperate need of an overhaul. Planning permission can be delayed for at least 12 months in some cases. "The Government has failed to tackle the planning system, which has broken down," Mr Eaton said. A shortage of land has seen prices soar by a quarter over the last 12 months.

The outburst came as Barratt warned that the housing market was likely to slow this year after a rapid period of growth. Barratt said current house sales were the highest the group had seen for more than a decade, prompting comparisons with the housing boom of the 1980s.

The strong housing market helped the group achieve a 38 per cent rise in pre-tax profits to pounds 34.1m last year, thanks to a 10 per cent rise in prices in the South-east, where Barratt has chosen to concentrate its new investment.

However, Mr Eaton warned the price of new homes in London and the Home Counties would come off the boil this year, rising by around only 3 or 4 per cent. Barratt also believes that the strong growth in the South- east is unlikely to ripple out to the rest of the country. According to the group, the housing market in the North of England is likely to remain relatively depressed with prices edging up by 2 or 3 per cent this year.

Barratt now builds 45 per cent of its houses in the South of England and that proportion will continue to rise.

The group plans to sell 8,000 houses this year and is on track to meet its target of 11,000 sales in the year 2000. Building costs rose 2 per cent last year as wage pressures from contractors subsided. Barratt forecasts a 3 per cent rise this year.

Mr Eaton yesterday moved to strengthen the group's board by appointing David Pretty, the chairman of Barratt's Southern Region, as managing director. The management shake-up comes after Sir Lawrie Barratt, the group's former chairman, took a back seat role at the group by retiring as chairman last November to become life president.

The results beat analysts' expectations, causing Barratt's shares to rise 13p to 319p.

Investment column, page 24

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