Barratt reports slip in sales rate

The country’s biggest housebuilder has confirmed trading has continued to struggle into the autumn as reservation rates fell during the period.

In a trading update, Barratt said net private reservations per average week were 169 between 1 July and 8 October, compared to a figure of 188 for 2023, which meant that total forward sales as at 8 October stood at 9,221 homes (9 October 2022: 13,314 homes) at a value of £2,362bn (9 October 2022: £3,603.1bn).

The firm admitted: “Reservation activity has continued to reflect the mortgage challenges faced by potential homebuyers, as well as the absence of Help to Buy reservation activity which accounted for 12% of private reservations in the prior year period.”

Today’s statement reiterated existing full year guidance and in a brokers’ note, Investec said: “It confirms a difficult, weak autumn trading season which is consistent with what we have heard recently from peers.

“Sales rates remain weak and incentives are clearly being widely used with bulk sales supporting volume delivery.

“The group is in good shape with the investment case pivoted around the macro-outlook and the nature and timing of recovery at some point in 2024. We would not expect any material changes to consensus expectations for FY24.”

>>See also: Top 50 Housebuilders

>>See also: Barratt recruits former British Land director to board

Meanwhile, building products firm Marshalls said revenue in the first nine months of the year to 30 September was 3% lower than last time at £528m as the housing slowdown blighted sales.

It said plans to cut costs, which includes axing 250 staff, closing a factory and cutting shifts and capacity at other sites, had largely been completed.

It said the outlook for the full year remained unchanged with analysts expecting revenue to be down 4.5% to £687m on pre-tax profit off 42% to £52.5m.