11/01/2018 10:37 GMT

Barratt Developments Cheers Bright Half-Year Performance

Housebuilder Barratt Developments has chalked up a “strong” half-year performance, driven by a rise in forward sales and completed homes.

Total forward sales picked up by 2% to £2.4 billion for the six months ending in December, as it cheered Government policies such as Help to Buy and the buoyant mortgage market.

The number of completions also ticked higher, lifting 2% to 7,324 over the period, with the average selling price climbing 6.5% to £281,000.

Barratt Developments

Barratt chief executive David Thomas (PA)

Chief executive David Thomas said: “We have delivered a strong performance in the first half, underpinned by our focus on quality, design and industry-leading customer service.”

Britain’s biggest housebuilder said the sales rate remained at 0.68 compared to the year before, while average reservations per week dropped to 246 from 247 in 2016.

While the firm is on track to secure “modest growth” in wholly-owned completions for 2018, shares were down 3% on the London Stock Exchange following a broker downgrade from Peel Hunt.

Barratt, which built 3,342 affordable homes in 2017, kick-started 93 new developments during the half year, up from 83 in 2016.

Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: “Having purchased plots for more than 13,000 new houses in the last six months, Barratt clearly thinks the current housing boom has further to run.

“Given the surge in prices and healthy forward sales, that’s a not unreasonable assumption.

“While rising interest rates may have cooled the porridge a little, we’re still in Goldilocks territory for housebuilders. That can’t continue forever, and the question for investors is how prepared are the builders for when conditions are no longer just right.”