Barratt sales rise on home buying surge
House builder Barratt said it continued to see strong demand for homes after the easing of coronavirus lockdown measures in June with an increase in its sales rate from July 1 to October 11.
The company on Wednesday reported a 24% rise in home completions to 4,032 with total forward sales of 15,135 homes compared with 12,963 last year at a value of £3.64bn versus £3.07bn in 2019.
“Our sales rate in the period was 0.87 net private reservations per active outlet per average week, up 20.8% on last year,” Barratt said.
Barratt said during the period, 51% of its private reservations used the government's Help to Buy equity loan scheme of which 74% were first time buyers, compared with 45% and 70% respectively a year earlier
The UK's housing market was effectively shuttered at the start of the lockdown in March as people were urged to avoid moving, viewings stopped and a number of construction sites temporarily closed. Restrictions for the sector were eased in May.
“Based on current market conditions, construction activity levels and assuming no further national lockdowns creating disruption to our construction sites, we continue to expect to grow wholly owned completions to between 14,500 and 15,000 homes in FY21, and in addition deliver around 650 completions from our joint ventures.”
Britain’s housing market has surged in recent months due to pent-up demand, people seeking bigger homes and a cut in property sales taxes.
Hargreaves Lansdown analyst William Ryder said despite the upbeat news "there are a few slightly concerning things to keep an eye on".
"High loan-to-value mortgages are increasingly hard to access as banks impose tighter lending restrictions, and Help to Buy is supporting a greater proportion of sales," he said.
"When the Help to Buy scheme changes next year some customers will need to find alternative ways of financing their new home, which could depress sales. It’s not a massive problem by itself, but could compound the impact of a recession if the recovery stalls.”