Barratt to build more homes than expected amid robust demand

Barratt Developments has said it is set to build 250 more homes this year than previously predicted, signalling continued resilience in the UK housing market.

The housebuilder told shareholders it expects to complete more than 18,000 homes during the current financial year, which would surpass pre-pandemic levels.

The firm said it built 8,067 properties over the six months to December – the first half of its financial year – but said this represented an 11% year-on-year decline compared with an early boom in demand during the pandemic.

David Thomas, chief executive of Barratt, described it as an “excellent first half” and hailed the “strong rebound” in the firm’s construction activity.

Meanwhile, the business reported a 0.6% increase in pre-tax profits to £432.6 million for the half-year, compared with the same period a year earlier.

The firm also said it has seen “strong forward sales”, reporting agreements on 15,736 homes as of January 31.

Mr Thomas added: “This increase in construction activity has not affected our focus on our customers, on quality and service and on acting in a responsible and ethical way.

“We continue to work hard to lead the industry in building the high-quality sustainable homes and developments the country needs.”

Nevertheless, Barratt is among housebuilders which could come under pressure as interest rate rises increase the potential for lower mortgage demand.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “Barratt Developments is certainly making hay while the sun shines as first timers rush to get on to the ladder and other buyers trade up for bigger homes, desperate for more space to meet new hybrid work needs.

“But with indications that house price growth has slowed, there are still concerns this buoyant book of orders will start to thin out, particularly as the cost of living squeeze intensifies and rate rises come in quick succession.

“The cheap loan party isn’t expected to last forever and as homebuyers reassess their spending priorities, house builders could soon be facing a more difficult trajectory.”

Shares in the company climbed 2.3% higher to 641.6p in early trading.