Barratt Homes adds to property gloom

Barratt Homes, Britain’s second largest housebuilder, has reported a 33% decline in the amount of sales agreed each week, compared with last year and added that the property market has deteriorated considerably.

The company blamed the credit squeeze, which in turn has meant that mortgage lending has all but dried up.

The latest figures from the Council of Mortgage Lenders show that mortgage lending has slumped almost 50%, compared to last year.

Total housebuilding revenues for the 19 week period to 11 May were £825 million compared to prior expectations of £893 million, a fall of 7.6%.

In the meantime, reservations per week averaged 276 over the period, an increase of 13.1% compared to 244 for the first half of the financial year, however, this was down 33.6% against expectations for the year.

Mark Clare, the company’s chief executive said a meaningful upturn in the housing market is not expected until there are improvements in the availability of mortgage finance.

However, the group believes that the medium-term outlook remains strong given the restricted supply of housing in the UK, concluded Mr Clare.

Earlier this week, rival house builders Redrow and Galliford Try, warned of significant falls in sales over recent weeks.

Furthermore, there were warnings recently from other housebuilding giants including Bovis Homes, Persimmon and Taylor Wimpey.

Persimmon recently confirmed that it is to stop building on new sites until market conditions improve, which could result in tens of thousands of job losses.

Story link: Barratt Homes adds to property gloom