BARRATT Developments PLC has reported continuing strong customer demand for new homes across the country with 2020 reservations up 21% on last year, for the period 1 July to 11 October.
New homes developments
Barratt currently has 340 development sites open, down from 374 this time last year reflecting the delay to site starts because of the national lockdown. However, Barratt has managed to launch 33 planned new developments in the last three months, helping to boost hopes of meeting its targets for home completions.
Since 1 July, the business has delivered 4,032 home completions, compared to 3,252 in the same period last year, up 24.0%.
Total forward sales at 11 October 2020 were 15,135 homes at a value of £3,647.6m, again a substantial increase on the same period last year, which saw sales of 12,963 homes worth £3,070.2m.
Barratt says its sites are operating safely across the country, including in local lockdown areas, with COVID-19 working practices and protocols in place, with an average of 294 homes constructed each week.
David Thomas, Chief Executive said, “There is continuing strong customer demand for our homes and we have a healthy forward order book. As we look ahead, whilst significant economic and political uncertainties persist, we believe our disciplined approach and strong balance sheet provide us with the resilience and flexibility to react positively to future challenges.”
Following banks demanding bigger deposits and no mainstream mortgage lenders providing mortgages at 95%, Barratt’s first time buyers are increasingly relying on Help to Buy. Since 1 July, 51% of its private reservations used Help to Buy and 74% of them were first time buyers.
The difficulties of mortgage borrowing are not subduing Barratt’s growth plans, however. The company has acquired 4,160 plots across 15 sites and approved the purchase of a further 484 plots on 4 sites since 1 July, expecting a minimum 23% gross margin, and 25% ROCE in the medium term on an annual target of 20,000 homes.
Barratt expects to sell between 14,500 and 15,000 homes in the company’s current financial year, and around 650 completions from its joint ventures.