Barratt sales prices jump 4 per cent

Published 14th Jan 2010

Barratt Developments, the UK housebuilder, said today that a switch to building more houses rather than flats has led to a rise in average sales price of 4 per cent over the past six months.

It boosted hopes that the worst is over for the housing sector.

The group, which is one of the UK's three largest housebuilders, said that its average sales price was now £167,000 as a result of the change in focus, which has followed a slump in flat sales as first-time buyers and buy-to-let investors are unable to secure mortgages.

It added that it expected prices to rise by a further 6 per cent by the end of its financial year.

Forward sales jumped by 43 per cent to £651.2 mllion in the period to the end of December, compared with the same period last year.

Mark Clare, Barratt's chief executive, said: “Over the last six months we have successfully refinanced the business, reduced debt and invested in land which will deliver higher returns.

"With margins growing and a 43 per cent increase in total forward sales, the market has improved but is still subject to the major uncertainties of both mortgage finance and the general economic outlook."

Barratt added that it believed operating margins would improve in the second half, as it boosted volumes and prices rise.

The group has more than halved its net debt, reducing it to £610 million compared with £1.276 billion at the end of June last year.

In November, the group embarked on a rights issue worth £720.5 million. It has also begun selling off commercial assets, including a property in Glasgow worth £25 million.

House prices rose for the sixth consecutive month in December, according to Halifax, the mortgage lender, with prices in the fourth quarter 3.5 per cent higher than over the previous three months.

However, in a statement, the group warned that it remained cautious, with growth “likely to be constrained by economic uncertainty and a lack of mortgage finance, particularly in the high loan-to-value sector”.

Source: ' Times '

View All Latest News