Barratt says it built only 76 more homes in the year to June compared with the previous year © Bloomberg
Barratt Developments said it would sell a “modest” number of new homes next year despite strong annual trading and burgeoning demand for its properties.
Britain’s biggest housebuilder revealed it built only 76 more homes in the year to June compared with the previous year, despite ongoing government efforts to tackle Britain’s housing shortage.
The UK government has said builders face tougher penalties if they fail to build on land they own after planning permission has been granted. Barrett said it completed sales for 17,395 units in the year to June compared with 17,319 units the year before.
In Wednesday’s trading update, the housebuilder said it expected to end its financial year with a 12 per cent rise in pre-tax profits to £765m, which was ahead of analysts’ expectations. Its shares rose 2 per cent to 596.5p.
The average selling price of Barratt’s homes increased 6 per cent to £275,000 while the value of its order book rose 19 per cent to £1.9bn. Barratt’s sales volumes have risen 55 per cent in the past six years but added it would “deliver modest growth in wholly owned completions” in 2018.
David Thomas, chief executive, said that although the housing market had stayed in a “positive environment” since the EU referendum, the group’s expansion plans would remain muted because of a shortage of skilled workers in the building trade.
“Our caution is not about consumer demand or the market, it is about getting enough skilled workers,” said Mr Thomas. “It has been an industry trend.” He added that Barratt was not concerned about a potential exodus of non-British EU citizens from the UK. “It is not related to anything political,” he said.
Barratt has enough land to build new homes for 4.5 years, it said on Wednesday. It slowed its pace of land acquisitions in the immediate aftermath of Brexit, which meant it bought enough to build 18,497 plots in the year to June, down from 24,397 in 2016. However, Mr Thomas said that this caution was shortlived and by September, “all the indicators were very good and we got back into the land market”.
The group reiterated it was proposing a special dividend in November 2017 and November 2018. It added that in the four years to November 2018, it will have delivered £1.4bn of cash returns in the form of dividends.