Barratt Developments, the housebuilder, shrugged off the tough housing market yesterday with an 11 per cent rise in annual profits and cautiously predicted a "gentle recovery" for the market over the next year.
Barratt has weathered the housing downturn better than some rivals, unveiling record pre-tax profits of £406.6m for the year to June, despite flat revenues of £2.5bn. Prices rose 4 per cent, with 14,351 homes sold.
David Pretty, the chief executive, said: "Last year's market was challenging, the worst for several years, and we're working on the assumption that the next 12 months are going to be challenging too." Many consumers have been put off buying homes by higher borrowing costs and rising utility bills, amid gloomy predictions of a housing crash which now looks unlikely.
Mr Pretty said the group had benefited from its wide geographic spread and product range (with homes from £70,000 to £2m), meaning it is "appealing to a wider range of buyers than others". Barratt is the biggest private provider of social housing in Britain. "We believe the market is steady at the moment. It is challenging, but the gloom is overdone," Mr Pretty said. "My view is that the market will continue its gentle recovery towards a normal market over the next year."
The group has secured 52 per cent of its sales target for this year, just three months into its financial year, and hopes to raise prices by 1-4 per cent.
Kate Moy, at Teather & Greenwood, said: "Barratt joins the small group of outperformers in this challenging market. If any housebuilder is capable of growing volume in these markets, Barratt is." Several builders have reported big falls in first-half profits, including Wilson Bowden.