Barratt sales up 71% lifted by Help to Buy scheme
Tuesday 14 January 2014
Barratt Developments, the biggest builder by volumes, has unveiled a huge 71 per cent rise in sales reservations to £1.26 billion — inspired by the Government’s Help to Buy scheme
It came as the nation’s biggest estate agent Countrywide also flagged up profits at the top end of expectations to the City. Revenues jumped 25% ahead of last year in the final quarter of last year, the company said.
Barratt’s forward sales position — up from £742.1 million a year earlier — was labelled “incredible” by some analysts. Its sales per site in the six months to December 31 were also 37 per cent ahead of the prior year.
Chief executive Mark Clare, who began Barratt’s online marketing campaign on Boxing Day, said: “The sales rates we are getting are not that dissimilar to where we were before the downturn.
Normally we see sales rates fall off in mid November, but there were still people shopping and buying in mid December.” The firm has also seen a “good strong start” to 2014.
Help to Buy — first introduced in March — has transformed the market with deposit boosts for first-time buyers and now a mortgage guarantee scheme.
Panmure Gordon’s Mark Hughes said: “Forward sales are incredibly strong year on year... the company is in an exceptionally strong position at this stage of the year.”
Clare highlighted a 19 per cent rise in housing completions over the half as a sign that the industry was gearing up to meet the extra demand for housing inspired by Help to Buy. “If the industry could grow at that rate for the next few years it would really make a difference.”
Barratt’s average selling prices have jumped sharply due to a bigger presence in the buoyant London market and building more expensive family homes rather flats.
But Clare played down fears of a bubble. “If you go outside London and the South East it is difficult to find house prices ahead of the inflation rate,” he added.
Countrywide also dampened fears of an over-exuberant market. It said: “the recovery is still at an early stage” and had to be kept in perspective with mortgage approvals little more than half their 1.4 million level in 2006.
“The key to a lasting recovery is assisting first time buyers and the general housing market outside of London and the South East,” it added.
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