Barratt chief executive calls for half-point rate cut

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The Independent Online

Barratt, Britain's biggest housebuilder, warned yesterday that annual sales would stay flat if the housing market fails to pick up in the autumn.

The comments added to the gloom surrounding housebuilders, even though Barratt stressed it had achieved further growth in volume, margins and pretax profits, and expects full-year results to meet analysts' expectations. Its broker, Cazenove, has forecast pre-tax profit of £380m.

David Pretty, the chief executive, said Barratt "won't really know how the market trends are panning out until September" when demand usually picks up. "If it doesn't happen, we would see little or no growth in completions," he added.

Mr Pretty called for one, or preferably two, quarter-point interest rate cuts over the next few months to inject confidence into the "challenging" housing market. "Buyers have become more hesitant. A quarter-point cut would be a boost to confidence," he said.

Barratt gave a more upbeat trading update than many of its rivals. Bovis Homes spooked the market on Thursday after saying first-half sales fell 16 per cent.

Barratt said completed sales rose 2 per cent to 14,351 in the year to 30 June, with the average selling price up 2 per cent to £170,000. Private house sales were down 1 per cent to 12,591, while social housing completions rose 35 per cent to 1,760.

The builder's forward order book stood at £774m at the start of this month, down from last year's record £880m when the housing market was still booming.

Mr Pretty said: "Our geographic spread and product range ... helped us go through the storm a little easier." Sales per site fell 10 per cent in the past year, but it hopes to benefit from 7 per cent more outlets this year. Barratt shares closed unchanged at 714p.

Meanwhile, shares in the brick maker Baggeridge fell 22p to 160.5p after it warned annual profits would miss forecasts because the slower housing market had hit demand for bricks.