Britain's Barratt upbeat on housing demand, urges rethink on safety levy

(Reuters) -British housebuilder Barratt on Thursday expressed confidence about housing demand, but urged the government to rethink its plan to expand a tax on companies to fund the removal of flammable roof coverings from buildings.

Britain last month agreed to a 5-billion-pound ($6.5 billion) levy on dozens of housebuilders to remove flammable cladding from buildings, which came into focus after the Grenfell Tower fire of 2017 that killed more than 70 people.

While companies including Barratt have agreed to the levy, Barratt - Britain's largest housebuilder - wants the tax to apply to all stakeholders rather than a small section of builders which have been asked to pay the levy.

"In our view, this is unjust and disproportionate, further punishing UK housebuilders who were not responsible for most of the historical buildings or building safety issues being addressed and fails to effectively allocate the cost of remediation to those responsible," Barratt said in a statement.

Britain's housing minister Michael Gove has used a carrot-and-stick approach to tackle the issue, forcing housebuilders, including Barratt, and rivals Persimmon and Taylor Wimpey, to sign up for the safety pledge, mainly on cladding repair works.

Shares in the UK housebuilding sector have dropped 29% so far this year, mainly over the uncertainty regarding to the cladding levy.

Barratt has so far set aside or spent 350 million to 400 million pounds towards safety of older properties, its website showed.

The FTSE 100 firm said its total forward sales, including joint ventures, was 4.38 billion pounds as of May 1, compared with 3.70 billion pounds a year earlier.

"We are seeing strong demand across the country ... we expect to deliver full year trading results in line with the Board's expectations," Chief Executive Officer David Thomas said.

(Reporting by Aby Jose Koilparambil in Bengaluru; editing by Uttaresh.V)