Barratt Developments Share Price
The Barratt Developments share price is up by 13.7% since the turn of the year to 761.5p per share. It remains some way off its pre-pandemic level of over 860p, however, if the housing market continues on its current trajectory, then it may do so by the end of 2021.
Housing Market
As house prices hit new highs, and look set to continue doing so, Barratt Developments seems a good bet. The total value of homes sold across the UK is forecast to reach £461bn in 2021, a rise of 46% from the year before.
This is according to analysis by Zoopla, the property platform, that expects the housing boom to continue. Zoopla also confirmed it believes home sales will reach 1.52m in 2021, an increase of 45% from the year before. Therefore the value of the homes sold this year would amount to £461bn.
However, it is important to consider that the performance of the Barratt Developments share price was on the back of highly supportive UK government housing policies. These measures will surely not remain in place forever.
Performance
Earlier this month Barratt Developments said it was in a “strong financial position” and could therefore afford to pay back £3.5m of business rates relief.
The payment is in addition to the £26m it paid back after the FTSE 100 company received the money through the furlough scheme.
Barrat also revealed that its construction activity is “progressing well”. The company built 321 homes on average per week between January and May. It forward sales book now stands at £3.69bn.
David Thomas, chief executive of Barratt, said: “We have seen strong demand for our high-quality, energy-efficient homes on well-designed developments, which means we now expect to increase wholly owned completions to between 16,000 and 16,250 homes this year, up from 15,700 in 2020, along with 650 joint venture home completions.”
The company’s current financial position and productivity, in addition to the positive outlook for the wider market, bode well for the Barratt Developments share price moving forward.
