Barratt warns housing market is cooling down

BArrATT Developments warned that the housing market is slowing after posting record profits of over £1bn for the first time.

The FTSe 100 housebuilder said the number of its homes being reserved by buyers has fallen below levels seen before the pandemic, which it attributed to lower availability as well as ‘ heightened macroeconomic uncertainty’.

Barratt boss David Thomas said while current trading was ‘more challenging’ during July and August, this was ‘not that surprising’ as consumer confidence took a hit from the cost of living squeeze.

Investors also seemed wary of a difficult period ahead for the property market as Barratt’s shares dropped 1.9pc, or 8.1p, to 414.1p.

The firm, however, reported a record profit of £1.05bn for the year to the end of June, up from £919m in the prior 12 months, as revenues climbed 9.5pc to £5.3bn. The figures were boosted by the completion of 17,908 new homes, a 3.9pc increase year- on-year and a return to pre-pandemic levels, as Barratt noted continued high demand for housing.

But the results were marred by an extra £396m in costs relating to fixing safety issues with some of the firm’s buildings such as cladding.

Thomas said the group’s ‘financial strength’ left it in a good position. richard

Hunter, head of markets at Interactive Investor, said while Barratt’s foundations may be ‘strong’, the sector as a whole was suffering.

Data from Halifax showed house prices growing strongly despite a modest slowdown.

The mortgage lender said average prices hit a record high of £294,260 last month – up an impressive 11.5pc yearonyear though this was slightly weaker than the 11.8pc rise in the year to July.