Barratt sees full-year outlook ‘modestly’ ahead after strong start to 2019

Barratt Developments has shrugged off Brexit pressures in the property market as the house-building giant “modestly” increased its full-year outlook after a strong start to the year.

The UK’s largest house-builder said total forward sales were up 2.4% to £3.4 billion, while weekly net private reservations remained largely stable at 0.79 against 0.8 a year earlier.

But it became the latest builder to outline rising cost pressures, with build inflation set to be 3%-4% in 2018/19 and remain at a similar level throughout 2019.

It said it now sources around 90% of building materials manufactured or assembled in the UK.

The group also said it continues to “monitor the market and economy” amid Brexit uncertainty.

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Barratt Developments chief executive David Thomas (Barratt Developments/PA)

Barratt chief executive David Thomas said: “Trading since the beginning of the year has been strong, the outlook for the year is modestly ahead of our previous expectations, and we are encouraged by our continued progress in driving operating efficiencies through the business.

“Whilst we continue to monitor the market closely, we are confident of delivering a good financial and operational performance in full-year 2018/19.”

The group said it was set to grow sales volumes toward the lower end of its medium-term target range this year, although this in line with market expectations.

It said customer demand was “good”, supported by a stable market backdrop.

This is despite rivals such as Crest, Telford Homes and Bellway all sounding the alarm bell over Brexit.

Figures out earlier this month from Nationwide show that house prices have now been increasing by less than 1% annually for five months in a row.

The most sluggish regions by far have been London and the South East, where Barratt has been reducing exposure.

But the Government’s Help to Buy initiative for first-time buyers, as well as the wide availability of mortgage finance, have helped Barratt’s performance in recent years and allowed it to mitigate Brexit uncertainty.

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