Barratt Developments, Britain’s largest home builder, has increased its forecast for the number of homes it plans to sell this year, supported by surging demand after the foreclosure as buyers seek to complete ahead the end of the stamp duty holiday purchase assistance program.
Barratt started the year with fewer homes available for sale after a period of snowstorm last summer and last fall after the first nationwide lockout, when sales soared 24% in four months. The company said the sales rate had since “normalized,” but shipments were still up 9.2% year on year to 9,077 in the six months ending in December.
While there are fewer homes available for sale in the first quarter of this year, leaving Barratt more reliant on construction activity, it has raised its completion forecast for its fiscal year, which ends in June.
“Based on current market conditions and site construction activity, we now expect wholly-owned deliveries to be between 15,250 and 15,750 homes,” said Barratt, who in October had forecast between 14 500 and 15,000 achievements.
“We had a great performance in the first half,” the company said. “In the first half of the year, we saw an increase in the rate of sale, with the underlying strong demand complemented by pent-up demand for the initial national foreclosure, the introduction of the stamp duty holiday and the end of aid. on purchase in March 2021 for existing owners. ”
Barratt, which intends to resume its dividend to shareholders starting next month, said its backlog was already sold over 90% forward for this fiscal year. It has an order book of 13,588 homes, up 14% year-on-year, valued at £ 3.2 billion, up 19% year-on-year.
The company said the average selling price of a private home rose 2.2% in the second half of last year to £ 319,000. The total average sale price, including the affordable homes sold, rose 1.1% to £ 283,000.
The housing sector received a major boost in July when Chancellor Rishi Sunak announced the suspension of stamp duty on property sales up to £ 500,000. However, the stamp duty holiday is due to end on March 31.
Starting in April, the Home Buyer’s Assistance Program – introduced in 2013 to allow people to buy new homes with as low as 5% down payment, with up to 20% of the home’s sale price. property covered by a government loan – will be reserved for first-time buyers only. It will be completely scrapped in March 2023.
« Barratt did well in 2020; without doubt, the real test begins now, ”said Dan Lane, senior analyst at Freetrade. “The end of the first lockout triggered a buying frenzy in the UK; this will not always be the case. Once the stamp duty returns and only first-time buyers can use help to buy, the need to enter quickly will also disappear. ”