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Barratt Homes reports a 45% jump in profits | Barratt Homes reports a 45% jump in profits |
(about 3 hours later) | |
House builder Barratt Homes has reported a 45% jump in profits to £565.5m, partly thanks to improving mortgage availability and government support through its Help to Buy scheme. | House builder Barratt Homes has reported a 45% jump in profits to £565.5m, partly thanks to improving mortgage availability and government support through its Help to Buy scheme. |
The firm said the market for new homes remained strong across Britain, with demand continuing to exceed supply. | The firm said the market for new homes remained strong across Britain, with demand continuing to exceed supply. |
It said private house prices also rose by 8.7% to an average of £262,500. | It said private house prices also rose by 8.7% to an average of £262,500. |
Barratt's chief executive, David Thomas, said the company was expecting further growth. | Barratt's chief executive, David Thomas, said the company was expecting further growth. |
He said: "The new financial year has started very well; we have a strong forward sales position." | He said: "The new financial year has started very well; we have a strong forward sales position." |
The FTSE 100 firm has built 16,447 new homes either itself or through joint ventures since this time last year and has committed £957m for nearly 17,000 more houses. | The FTSE 100 firm has built 16,447 new homes either itself or through joint ventures since this time last year and has committed £957m for nearly 17,000 more houses. |
Chairman John Allan said they had delivered an "excellent" financial performance. | Chairman John Allan said they had delivered an "excellent" financial performance. |
Due to the strong results, Barratt said it would pay investors a 10-pence-per-share special dividend. | Due to the strong results, Barratt said it would pay investors a 10-pence-per-share special dividend. |
Richard Hunter, head of equities at Hargreaves Lansdown, said: "Housebuilders find themselves in an extremely sweet spot at present and Barratt is no exception. A combination of low interest rates, a general lack of new housing supply, rising house prices and increased mortgage availability all play into its hands." | Richard Hunter, head of equities at Hargreaves Lansdown, said: "Housebuilders find themselves in an extremely sweet spot at present and Barratt is no exception. A combination of low interest rates, a general lack of new housing supply, rising house prices and increased mortgage availability all play into its hands." |
But he cautioned that the growth in the housing and mortgage markets could slow if the Bank of England raises interest rates over the next six months. | But he cautioned that the growth in the housing and mortgage markets could slow if the Bank of England raises interest rates over the next six months. |
Later, the government announced its latest figures for the take up of its two Help to Buy schemes. | |
It said these are proving equally popular. | |
The Equity Loan scheme has issued 56,402 mortgages since it started in April 2013 - it only applies to newly built houses. | |
Under this, the government takes a stake of 20% of a property's value (up to £600,000) and receives its loan back once the property is sold or the mortgage re-paid. | |
The Mortgage Guarantee scheme has issued 56,401 mortgages since starting in October 2013 and can be used for any property. | |
In this scheme the government underwrites loans of up to 15% of a property's value up to £600,000. |