Housebuilder Barratt expects further growth after ‘strong’ H1 performance

● Average selling price up 6.5 per cent amid City concerns over sector’s outlook

Britain’s biggest housebuilder, Barratt Developments, has chalked up a “strong” half-year performance, driven by a rise in forward sales and completed homes.

However, there was concern in the City about how long positive conditions will last for the sector, with one analyst saying Barratt is more susceptible to a market slowdown than peers.

The group saw total forward sales pick up by 2 per cent to £2.4 billion for the six months to 31 December, as it cheered government policies such as Help to Buy and the buoyant mortgage market.

The number of completions also ticked higher, lifting 2 per cent to 7,324 over the period, with the average selling price climbing 6.5 per cent to £281,000.

Chief executive David Tho- mas said: “We have delivered a strong performance in the first half, underpinned by our focus on quality, design and industry-leading customer service.”

The housebuilder said average reservations per week dropped to 246 from 247 in 2016, adding that it is on track to secure “modest growth” in wholly-owned completions for 2018. Barratt, which built 3,342 affordable homes in 2017, also kickstarted 93 new developments during the half year, up from 83 in 2016.

The group said last month that it had delivered a near£300 million boost to the economy north of the Border, in the year to June building 1,708 homes in Scotland and supporting around 5,000 jobs.

Commenting on the latest results, Hargreaves Lansdown equity analyst Nicholas Hyett said: “Barratt clearly thinks the current housing boom has further to run. Given the surge in prices and healthy forward sales, that’s a not unreasonable assumption.

“While rising interest rates may have cooled the porridge a little, we’re still in Goldilocks territory for housebuilders. That can’t continue forever, and the question for investors is how prepared are the builders for when conditions are no longer just right.”

Also sounding a note of caution was Shore Capital Markets analyst Robin Hardy, who said: “Overall, we still see Barratt as weaker financially than the peer group, and more vulnerable to a market slowdown driven by weak pricing.”

It comes after Taylor Wimpey, the UK’S third-largest housebuilder, on Wednesday said it believed Britain’s property market remains “solid” despite wider economic uncertainty. In a full-year trading update, the group reported a 5 per cent rise in completions to 14,541 over 2017, while average prices on private sales lifted 3 per cent to £296,000.