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Barratt Developments forecasts £1.1 billion profit as outer London home sales lift average house prices

·2-min read
Bricklayers at work on a Barratt Developments site (Jonathan Buckmaster/Daily Express/PA) (PA Wire)
Bricklayers at work on a Barratt Developments site (Jonathan Buckmaster/Daily Express/PA) (PA Wire)

Barratt Developments has forecast annual profit of £1.1 billion and said it completed a greater propotion of its more affordable homes in outer London in its last financial year, helping lift average selling prices.

The FTSE 100 house builder said the average price of its affordable properties reached £159,000 from £146,500 last year, “reflecting an increased proportion of completions” in outer London. Its private average selling price touched £341,00, up from £325,500.

It said adjusted annual profit was expected to be around £1.1billion, “slightly ahead of current market consensus expectations”, for the financial year to June 30.

Barratt signed the government’s building safety pledge and an initiative to solve potential safety problems with buildings identified after the Grenfell Tower Fire disaster. It reported costs of £412 million for “legacy property costs associated with building safety related remediation activities” and it said further repairs relating to the pledge would be carried out over the next three-to-five years. Barratt said safety considerations would be “paramount in the prioritisation and scheduling of works.”

The number of completions returned to levels seen before the Covid-19 pandemic, reaching 17,908 including joint ventures from 17,243 in the previous financial year. The completion of a London apartment block with over 220 homes was deferred into 2023, “reflecting resource related delays in the building control process.”

David Thomas, Barratt’s chief executive, said: “We are delighted that completions have now returned to pre-pandemic levels and I am grateful for the hard work and dedication of our teams and partners over the past two years to achieve this important milestone.”

He acknowledged there were “macro-economic uncertainties ahead”, but added that “the housing market remains robust, our forward order book is strong and we have the resilience and flexibility to react to changes in the operating environment.”

Barratt introduced an accelerated 5% pay increase from 1 April 2022 and a further temporary salary supplement of £1,000 to all  employees below senior management, phased over the coming six months to 31 December 2022 in order to help retain staff in a tight employment market and a time of strong inflation.

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