Shares in the UK’s biggest house builder Barratt Developments (BDEV) climbed 1% to 703p after the firm raised its full year earnings guidance thanks to an ‘excellent’ recovery in the volume of completions.
For the year to June, the company now sees adjusted pre-tax profits ‘marginally above the top end of market expectations’, which are currently between £860 million and £900 million.
That would take earnings back towards their pre-pandemic level of £909 million in the year to June 2019, after last year’s profits slumped to £492 million due to the pandemic.
Chief executive David Thomas was upbeat on the outlook: ‘Whilst these are still uncertain times, we enter the new financial year in a strong position and remain focused on our medium-term targets, including delivering 20,000 homes a year.’
In the last year the firm delivered 17,243 completed homes, almost as many as in the year to June 2019, while forward home sales as of last month were 14,334 units with a value of £3.47 billion, 25% above 2019 levels in volume terms and 33% higher in value terms.
Average selling prices increased to £289,000 last year compared with £280,300 the previous year and £274,400 in 2019, with private selling prices hitting £325,000 against an average of £311,00 in 2019 and 2020. The average private selling price on its forward order book is higher again at almost £340,000.
The latest data released by HM Land Registry showed annual house price inflation running at 10%, with the average price of a UK property now £254,624, marginally above the recently tapered stamp duty threshold of £250,000.
