Help to Buy scheme helped lift sales at Barratt

Wednesday, 15 January 2014 12:04

Barratt Developments, the biggest builder in terms of volumes, has announced an enormous 71 per cent rise in sales reservations – an increase that has been encouraged by the government’s Help to Buy scheme. The boost caused sales to rise to £1.26 billion last year.

The Help to Buy project, which was first introduced by the government in March 2013, has helped to transform the housing market with deposit boosts for first-time buyers, and now it includes a mortgage guarantee scheme.

Countrywide, the nation’s biggest estate agent also revealed profits at the top end of the expectations made by City analysts. Its revenues jumped 25 per cent ahead in the last quarter of 2013, compared to 2012.

Barratt’s forward sales position – up from £742.1 million a year earlier – was labelled as “incredible” by some analysts. Its sales per site in the six months ending in December 31st were also up 37 per cent compared to 2012.

Mark Clare, chief executive officer of the company, began Barratt’s online marketing campaign on Boxing Day.

He said: “The sales rates we are getting are not that dissimilar to where we were before the downturn.

“Normally we see sales rates fall off in mid November, but there were still people shopping and buying in mid December.”

So far, the firm has seen a “good strong start” to the new year.

Mark Hughes, from Panmure Gordon, said: “Forward sales are incredibly strong year on year… the company is in an exceptionally strong position at this stage of the year.”

Mr Clare highlighted that the 19 per cent rise in housing completions was a sign that the industry was preparing for the extra demand for housing inspired by the government scheme. He believes that if the industry continues to grow at the same rate it would have a hugely positive impact on the industry.

Barratt’s average selling prices have increased sharply due to a bigger presence in the booming London market and because the company is building more expensive family homes rather than flats.

Mr Clare was keen to play down fears of another bubble, adding: “If you go outside London and the South East it is difficult to find house prices ahead of the inflation rate.”

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