Barratt has become the latest housebuilder to report rising sales as the government extended efforts to tackle the UK housing crisis.
Sales rose 20.7% to £2.5bn between July and November, prompting the company to make a record dividend payment of more than £200m to shareholders. It is holding its annual meeting in London on Wednesday afternoon.
Barratt said it was seeing high levels of demand across all regions. Last week, York-based housebuilder Persimmon said the third quarter had been an “extremely busy time” for the company, when it reported a 12% increase in sales to £780m. Another builder, Bellway, posted a 44% jump in full-year profits to £354m last month, better than expected.
Davy analyst Colin Sheridan said Barratt’s figures showed “further evidence of a very strong autumn selling season in the UK”.
The industry has been the beneficiary of the government’s help-to-buy scheme, which has been extended until 2020 and is aimed at helping first-time buyers into the market. Barratt said it was supporting the government on its starter homes scheme, which has set out to provide 200,000 homes for first-time buyers over the next five years.
David Thomas, the company’s chief executive, said: “Against the backdrop of a significant structural shortage of new homes in Britain, we have made a strong start to the year.”
However, the company has scaled back new developments and hirings. It launched 49 developments – down from 80 at this stage last year – and now operates from 380 sites, compared with 395 last year. Barratt said there were still shortages of skilled labour in some trades and locations. It hired 327 new graduates, trainees and apprentices this year and is recruiting another 250 for the next financial year.
Barratt’s shares slipped 1.6% to 566.32p in early trading on Wednesday. Analyst Charlie Campbell at Liberum said last week after the Persimmon update: “Valuations for the three largest UK housebuilders (Barratt, Persimmon and Taylor Wimpey) are too stretched to accommodate any bad news on future gross margins.
“It is our view that house price inflation in future is likely to moderate as affordability is stretched and that the FPC [the bank of England’s financial policy committee] can keep a lid on house price inflation through its role as overseer of UK mortgage lending standards.”
