Housebuilder says tough market conditions and lower buy-to-let activity is to blame for 1567 fewer completions in last six months of 2007
Barratt, the UK’s third largest housebuilder, warned today that it is “still too early to tell” how badly the impact of the credit crunch will hit the spring selling period.
In a trading update, Barratt said that its forward order book stood at £1.26bn, 6% down on the combined order books of Barratt and recent acquisition Wilson Bowden at this point in 2006.
On this pro forma basis, total completions fell from 10,623 to 9,056 which the company said reflected an expected reduction in outlets, lower buy-to-let activity and tougher market conditions.
Barratt chief executive Mark Clare said that he believed the market fundamentals supporting the industry remained strong, but that it was too early to “tell what the market will bring” in the Spring quarter, traditionally a strong period for housebuilders.
However, in a bullish statement he added: “Against a backdrop of a more difficult housing market, we have continued to trade satisfactorily with prices holding up and costs reduced.”
The company added that its operational integration of Wilson Bowden was now complete, and it was confident of achieving synergy targets of £30m in 2007/8 rising to at least £60m the following year.