Barratt Developments shares (LON: BDEV) rose on Wednesday after the housebuilding group shared a trading update for the period from 1 July to 11 October 2020.
The FTSE 100 firm posted 4032 agreed sales for the period, a 24% increase from the year previously – helped by pent-up demand and the Help to Buy scheme.
Total forward sales reached 15,135 homes, up from 12,963 a year ago, and totaled a value of £3.6m.
“Our sites continue to operate safely and successfully across the country, including areas of local lockdown, enabled by our extensive COVID-19 working practices and protocols. Construction activity remains in line with FY21 planned output, with an average of 294 equivalent homes constructed per week in the period,” said the group in a statement.
Whilst mortgage rates remain relatively attractive, since the pandemic Barratt Developments has seen a material change in loan to value (LTV) lending criteria with no mainstream mortgage lenders providing mortgages at 95% LTV for new-build homebuyers. This has increased the reliance of first-time buyers on Help to Buy. Between July and October, 51% of the group’s private reservations used Help to Buy.
David Thomas, the housebuilder’s chief executive, commented: “Health and safety remains our number one priority and we remain focused on keeping our people safe while we rebuild completion volumes, bring further operational improvements to our business, and deliver on our commitment to build the highest quality homes across the country.
“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.”
Amid the economic and political uncertainty, the group has ensured investors they remain in a strong position.