Barratt bounces back as housing market recovers
THE Help to Buy scheme and a stamp duty holiday gave Britain’s biggest housebuilder a shot in the arm as the property market picked up speed.
Between July 1 and October 11, Barratt Developments handed over the keys for 4,032 homes – 24pc higher than the same period of last year.
The housing market has soared since it came out of lockdown in May, with pent-up demand leading to a flurry of completions and, more recently, the Government suspending stamp duty on homes worth less than £500,000 until next March. But another Government salve, the Help to Buy Scheme, was clearly visible in Barratt’s trading update yesterday.
The number of private reservations using the recently extended programme rose to 51pc, from 45pc in the same period of last year.
Introduced in 2013, the controversial loan scheme essentially allows people to buy a newbuild house with a small deposit – and developers claim the programme is crucial in the effort to tackle the UK’s chronic housing shortage. The reliance is likely to continue, Barratt said, as it pointed out mortgage lenders were currently offering 5pc mortgages for firsttime buyers.
Another boost could be on the horizon for Government-backed 5pc mortgages – but even without this Barratt’s orders are up 17pc to 15,135 homes, worth £3.65bn.
Barratt shares climbed 1.7pc, or 9.4p, to 553.2p.
And rival builders also boosted by Help to Buy rose, including Taylor Wimpey (up 1.8pc, or 2.1p, to 119.55p) and Persimmon (up 1.5pc, or 38p, to 2581p).
But the rise among blue- chip builders wasn’t enough to keep the FTSE 100 in the red. London’s premier index fell 0.58pc, or 34.65 points, to close at 5935.06.
The FTSE 250, on the other hand, rose 0.33pc, or 59.40 points, to 17,950.41, after eager investors piled into companies whose services have been in high demand during the pandemic.
Technology group Kainos was the top riser across the FTSE 350 after it rallied 31.2pc, or 318p, to 1338p. It said it expects profits this year to be ‘materially ahead’ of forecasts after many of its clients – which include the NHS – had to rapidly shift to remote working during the pandemic.
Synthomer, which makes polymers used in medical gloves, was in second place on the FTSE 350 leaderboard after it also said it would outperform this year.
Shares in the group, which has brought back its dividend, spiked 16.6pc, or 55.4p, to 388.4p.
Elsewhere on the mid-cap index, emerging markets-focused asset manager Ashmore (up 7.7pc, or 28p, to 391p) reported it had a bumper first quarter. The value of its assets increased by 2.3pc to £ 66bn in the three months to September.
Things were shakier over at recruiter Page Group, whose industry has been battered by the jobs bloodbath triggered by lockdowns, but shares still managed to rise by 1pc, or 4p, to 415.2p.
Profits in the most recent quarter fell by around a third, to nearly £144m, and it warned that its business in the UK was faring worse than its European and Asian arms. The latest results and trading update season also prompted moves on the junior market.
Retail investor favourite Angling Direct failed to make a splash with traders. Sales rose 21pc to £32m in the six months to the end of July and profit by 250pc to £1.4m as Britons flocked to take up fishing over the spring and summer as Covid restrictions stymied socialising.
However, the company admitted it wasn’t sure how long the ‘exceptional trends’ of the last few months would continue. Shares fell 4.7pc, or 3.25p, to 65.25p.