The rapid rise in house prices in London and the South-East does not represent a bubble because the rest of the UK is seeing nothing like it, Britain's biggest housebuilder declared yesterday.
Mark Clare, the chief executive of Barratt Developments, was speaking as he reported a rise in sales reservations described as "incredible" by City analysts, with little sign of the traditional slow period usually seen over the Christmas season.
Barratt's sales reservations shot up by 71 per cent to £1.26bn – boosted by the Government's Help to Buy scheme. Its average selling prices have jumped sharply because it has a bigger presence in the buoyant London market and builds more expensive family homes rather than flats. But Mr Clare played down fears that the market was overheating. "If you go outside London and the South-East it is difficult to find house prices ahead of the inflation rate," he said.
Mr Clare, who began Barratt's online marketing campaign on Boxing Day, added: "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 – introduced last March – has transformed the property market with deposit boosts for first-time buyers and now a mortgage-guarantee scheme. Mr Clare highlighted a 19 per cent rise in housing completions over the half-year as a sign that the industry was gearing up to meet the extra demand inspired by the scheme.
"If the industry could grow at that rate for the next few years it would really make a difference," he said.
The nation's biggest estate agent, Countrywide, also flagged up profits at the top end of expectations. Its fourth-quarter profits in 2013 were 25 per cent higher than the same period in 2012. Total income for the three months to 31 December came in at £171m.
- More about:
- Dwelling Houses And Apartments