Barratt Developments has forecast “modest growth” in home sales and slowed its pace of land purchases as clouds of concern hang over the UK housing market.
The builder – known for its new family homes on housing estates – said in a trading update for the year to June that it has delivered its highest number of completions in nine years.
Barratt said its pre-tax profit for the full year would rise 12 per cent to around £765m. It said it only built 76 more homes than it had in the previous year, despite the government’s long-held plans to tackle a housing shortage.
The company also struck a soft note of caution about the near future, following the UK’s snap election and decision to leave the EU.
In a trading update, the group said:
In FY18 we expect to deliver modest growth in wholly owned completions year on year.
Barratt approved approved £957m worth of land purchases, down from £1.1bn a year ago.
It said:
Whilst this is lower than historical levels, it reflects our caution immediately following the EU referendum. At 30 June 2017 the Group had around a 4.5 year supply of owned and controlled land, in line with our target.
The UK housebuilding sector’s financial performance has so far shrugged off Brexit-related concerns.
Construction group Galliford Try said earlier this week that its full-year profits would exceed analysts’ expectations, while Persimmon the UK’s second-largest builder, has announced a 12 per cent rise in half-year sales.
Yet builders and their investors remain cautious. The high-end London housing market has stalled, companies have expressed worries about a shortage of workers from abroad and there are concerns that the weaker pound will increase builders’ input costs.
Earlier this week, Galliford Try chief executive Peter Truscott said “We would be daft not to be aware of the uncertainties in the wider macro-economy. “