Barratt's forward orders break €1.4bn

FTSE-listed housebuilder Barratt Developments said today that forward orders had broken through the £1bn (€1.4bn) mark despite concerns over a British housing market slowdown.

The Newcastle-based company said that although interest rate rises had moderated demand, it had enough orders and completions to secure 70% of its full-year projection.

Barratt told investors at its annual meeting that lower price rises in the year ahead would improve affordability and benefit its sales performance.

Chairman Charles Toner said: “Despite negative media reporting, and the uncertainty this causes potential buyers, we are currently achieving sales levels sufficient for us to secure another year of progress.”

He said historically-low interest rates, good employment levels and supply shortages due to difficulties in the planning system were underpinning the market.

This meant that in the medium and longer term, overall demand would continue to exceed supply.

The Bank of England has kept interest rates on hold at 4.75% for the last three months, after five rises since last November showed signs of cooling the housing market.

The latest house price survey from the Nationwide Building Society showed subdued growth during September.

The slowdown helped reduce annual house price inflation in the UK to 17.8% from 18.9% the previous month – its lowest level since March this year.

Some economists have warned of a much sharper fall in prices during the next few years.

Barratt said today that its financial position was “very strong”, leaving it confident of meeting the challenges ahead.

In the year to June 30, the group saw its twelfth year of record results, with pre-tax profits rising 27% to £367.7m (€525.2m) and the full-year dividend increasing 25% to 21.58p.

Mr Toner said today that these “excellent all-round results” reflected Barratt’s organic growth strategy and the continuing strength of the business.

Shares rose 5p to 520.5p today.