Barratt update boosts hopes of recovery in housing market

Barratt developments tendered further evidence of a revival in the housing market, revealing strong growth in the number of reservations at its sites.

The housebuilder, the UK's second- largest by market value, said home buyers were returning, with net private reservation rates per site running 34 per cent ahead of the levels seen last year. The forward order book also showed signs of recovery, and stood at £846.6m at the beginning of November, compared with £817.7m in 2008.

Mark Clare, the company's chief executive, remained cautious, however, saying: "While trading conditions in the housing market have improved, activity levels will remain constrained until the availability of mortgage finance increases, particularly at higher loan-to-value levels."

Given the constraints, Barratt stuck by its forecast of approximately 12,000 completions in the year to June.

The trends evidenced in Barratt's statement were similar to those highlighted by Persimmon, the largest housebuilder by market value, which issued an update at the start of the week, saying that forward sales were running well ahead of last year. "The market is encouraging. Buyers are back," Persimmon's chief executive, Mike Farley, said on Monday, raising hopes across the sector.

Like Barratt, the company was concerned about mortgage availability. Persimmon also warned of the possible impact on its markets of "any significant increase in unemployment".