Member Article

Barratt battles back against mortgage slump

NEWCASTLE-based housebuilder Barratt Developments this morning revealed an upturn in sales and forward reservations, despite battling against the ongoing slump in mortgage lending levels.

The plc saw revenues in the six months to the end of December 2010 climb £5m on last year to £877.6m, while forward sales for the group as of this month, are up 5.4% to £893.5m.

While the company pointed to its ability to control costs as key to its resurgence, it warned that the UK housing market remains fragile and longer term recovery is still dependent on greater availability of mortgage finance.

In fact, as reported in our personal finance section today, the latest figures show mortgage approval levels in January were virtually unchanged from December’s two-year low of 28,907.

Net mortgage lending rose by £1.6bn, almost double December’s increase of £0.9bn, but this figure still remains low compared to historical levels

Barratt said it had achieved an average net private reservation rate of 0.57 per site per week over the last six weeks, up from 0.39 in the first half of its financial year.

“With our continued focus on tight cost control and drive for improved operating efficiency, combined with an increase in completions from new higher margin land going forward, we expect to deliver further improvement in the group’s performance,” the company said this morning.

The average selling price for Barratt properties increased by 5.7% in the six months to 31 December to £175,800, with private average selling price increasing by 10.8% to £191,900, mainly as a result of mix changes.

This was posted in Bdaily's Members' News section by Ruth Mitchell .