Housing boom sees Barratt Developments up outlook for year

Housebuilder Barratt Developments has “modestly” hiked its outlook for the full year after a strong start to 2021 thanks to a booming property market.

The group said it is set to complete more homes this year than first predicted, at between 16,000 and 16,250, with a further 650 joint venture completions.

It comes after the housing market roared ahead in recent months due largely to government measures to stimulate demand and attract first-time buyers.

UK house prices hit a new record of £238,831 in April after rising 2.1 per cent since March in the biggest monthly increase since 2004, according to figures last week from Nationwide Building Society.

Britain's housing market has roared ahead in recent months due largely to government measures to stimulate demand and attract first-time buyers. Picture: Rui Vieira/PA Wire

Barratt announced it would repay around £3.5 million of business rates relief on its show homes and sales offices due to its strong trading. It has already repaid £26m of furlough cash in its first half.

The firm said: “Reflecting both strong trading and our successful increase in construction activity, we now expect 2020-21 wholly owned completions to be between 16,000 and 16,250 homes and to deliver around 650 joint venture home completions.

“As a result, we now expect an out-turn for the full year modestly above the board’s previous expectations.”

Freetrade analyst David Kimberley said: “Part of the success Barratt has seen in the past six months has been driven by pent up demand and the huge level of government support the housing sector has received over the course of the pandemic.

“The group will be hoping those measures served as a stop-gap, helping to keep things going during the pandemic and ensuring they can continue once we return to normality.

“But it’s easy to see how demand could peter out as the stamp duty holiday comes to an end and further restrictions are placed on the help to buy scheme.”

Laura Hoy, equity analyst at Hargreaves Lansdown, noted: “The UK housing market is cooking with gas. There’s no sign that demand is slowing as the government continues to keep a floor under the market with 95 per cent mortgages and a tapered reintroduction of stamp duty fees. Barratt is keeping pace with clamouring buyers, and that should translate into a strong performance this year.”

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