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Barratt says housing market remains tough
8 Sep 2010Housebuilder Barratt today said wider economic fears and the lack of mortgage finance meant the market for new housing was still challenging as it reported a jump in profits.
House prices fell much faster than expected last month, according to a monthly survey from mortgage lender Nationwide, stoking concerns that Britain could be headed for a double-dip recession.
Barratt said it would therefore continue to focus on prices rather than volume and would not reinstate dividends, unlike rivals Bovis and Persimmon.
For the year to end-June it reported operating profit of £90.1 million, up from £34.2 million a year ago.
Barratt had said in July it would report operating profit of at least 85 million pounds for the year thanks to a strong second-half performance.
Reader views (1)
"lack of mortgage financing"
This is the usual mantra from house builders. What they ignore is that people do not want to borrow for these over priced new homes and most are reducing and repaying their existing mortgages.
Barratt is right to therefore focus on prices rather than volume. This is because they know that there is 650,000 empty homes and the Housing Minister Grant Sapps would like to see those homes refurbished before adding to the stock of housing.
There are simply to many volume house builders and many have reduced their workforce. Now they need to amalgamate if they are to survive. Companies like Taylor Wimpey will massive debts, pension deficit and losses will probably struggle to survive as reflected in their share price.
- Sam, London,UK., 08/09/2010 10:01
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