Barratt Developments shares were weaker in early trade on Wednesday following the release of a trading statement that pointed to continued soft trading in the face of rising interest rates and ‘mortgage challenges’.
The Barratt Developments share price was 2.6% lower in early trade.
Key sales metrics deteriorated from 1st July 2023 to 8th October compared to the same period last year as net private reservations per average week fell to 169, down from 188 last year, and net private reservations per active outlet per average week declined to 0.46 from 0.55 in 2023.
Total forward sales stood at 9,221 homes as of 8th October 2023. This represents a sharp decline from 13,314 homes as of 9th October 2022.
“The trading environment remains difficult, with potential homebuyers still facing mortgage challenges. Against this backdrop, we are focused on driving revenue whilst continuing to manage build activity and carefully control our cost base,” said David Thomas, Chief Executive of Barratt Developments.
Barratt Developments said they still expect to complete between 13,250 and 14,250 homes in FY24.
“New home buyers are still exercising considerable caution, given the higher cost and reduced availability of mortgages. However, expectations for the year ahead already reflect this challenging backdrop meaning Barratt has maintained its full year targets,” said Wealth Club’s Charlie Huggins.
“Barratt is doing all it can to weather the current storm in the housing market. The group has taken a knife to costs, has stepped back from land purchases and is offering greater incentives to buyers. The reality however is that there is so much out of its control. Its destiny depends to a considerable extent on housing market conditions.”
