Barratt at home with demand for property

Published on Friday 12 January 2007 11:54

HOUSEBUILDER Barratt said today that it was continuing to see demand for its homes, with sales and average selling prices continuing up over the first half of its current year.

In a update ahead of its interim results, Barratt - one of Scotland's biggest housebuilders - said that with high employment levels across the UK still underpinning the housing market, business remained good and within its expectations.

It said it had already secured over 70 per cent of this year's expected volumes.

But the company, which has a string of developments across Edinburgh, including Tradewinds, West One, Sapphire Point, EH7 and the Artworks, said that it was far too early to be certain of the market trends for the full year.

And it said it was particularly early given the possible impact of the Bank of England's decision yesterday to raise interest rates for the third time in just six months, this time to 5.25 per cent.

However, the firm, which has 33 operating divisions across the UK, remained upbeat.

"Against the backdrop of a competitive but stable market, with good buyer confidence, we have delivered a strong sales performance in the first half," chief executive Mark Clare - who replaced the retiring David Pretty last October - said in a statement.

"Our continued focus on driving improved overhead efficiencies . . . and strict cost control of build costs, should enable us to deliver a robust operating margin in the first half, with pre-tax profits in line with management expectations," he added. Newcastle-based Barratt is expected to report its half-year results in March, which will indicate whether the firm is on track to deliver the 403 million pre-tax profit the City is expecting for its current full trading year.

Meanwhile, fellow housebuilder Bellway, which also has Lothians development, said today it was on course to achieve record levels of completions and turnover, despite recent interest rate rises. Ahead of its annual meeting, chairman Howard Dawe said Bellway was "cautiously optimistic" of achieving its 16th consecutive year of growth by July 31.

Over its last full year, Barratt booked a profit of 391m on revenues of 2.43 billion. Total reservations are up 25 per cent from a year ago and forward sales climbed to a record 1.03bn, from 700m over the same period a year ago. Average selling prices also maintained their momentum, climbing to 165,000, up from 162,900 a year ago.

Within that, Barratt said private completions rose four per cent to 5791 homes at an average price of 184,200, while social housing completions fell 1.3 per cent to 1415 at an average price of 86,600 - down two per cent.

Mr Clare said: "With the key spring selling period still ahead of us, it is clearly too early to be certain of market trends for the rest of the year. However, the fundamentals of the housing market remain sound and we expect it to continue to perform satisfactorily over the coming six months.

"The strength of our forward sales, our national geographic spread and product range, combined with our urban regeneration and social housing expertise, leaves us well placed for the future."