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| Barratt cuts price of £1m-plus London homes | |
| (about 1 hour later) | |
| One of Britain’s biggest housebuilders has started cutting prices on some of its most expensive London homes because of waning demand at the top end of the market. | One of Britain’s biggest housebuilders has started cutting prices on some of its most expensive London homes because of waning demand at the top end of the market. |
| Barratt Developments said that although overall market conditions were healthy, it was proving more difficult to sell homes priced above £1m in the capital because of too much supply. | Barratt Developments said that although overall market conditions were healthy, it was proving more difficult to sell homes priced above £1m in the capital because of too much supply. |
| David Thomas, the Barratt chief executive, said: “Market conditions in London at higher selling prices remain more challenging. To mitigate these risks we have taken pricing action on a number of our sites in London.” | David Thomas, the Barratt chief executive, said: “Market conditions in London at higher selling prices remain more challenging. To mitigate these risks we have taken pricing action on a number of our sites in London.” |
| Barratt has 385 sites in the UK, about 20 of which are in London, with six or seven classed as higher-end in the capital. Thomas said the company was lowering prices by about 5% to 10% on a few of its most expensive, centrally located London sites in zones one and two. | Barratt has 385 sites in the UK, about 20 of which are in London, with six or seven classed as higher-end in the capital. Thomas said the company was lowering prices by about 5% to 10% on a few of its most expensive, centrally located London sites in zones one and two. |
| He said that in another move to “de-risk” its London portfolio, Barratt had exchanged on a “build and sale” agreement, selling a whole development of 39 apartments for £47m. Under such an arrangement, a housebuilder would sell at a reduced price, but avoid the cost and uncertainty of running show homes and offices from the new development. | He said that in another move to “de-risk” its London portfolio, Barratt had exchanged on a “build and sale” agreement, selling a whole development of 39 apartments for £47m. Under such an arrangement, a housebuilder would sell at a reduced price, but avoid the cost and uncertainty of running show homes and offices from the new development. |
| In a trading update for the period between 1 July and 13 November, Thomas said that more broadly the Brexit vote had not dampened consumer demand for new homes, largely because of good mortgage availability and a national housing shortage. | In a trading update for the period between 1 July and 13 November, Thomas said that more broadly the Brexit vote had not dampened consumer demand for new homes, largely because of good mortgage availability and a national housing shortage. |
| “This has been another good trading period for the group. Consumer demand is strongly supported by good mortgage availability. We are mindful of the potential for economic uncertainty created by the outcome of the EU referendum. However, market fundamentals are robust, and we remain a housebuilder of choice.” | “This has been another good trading period for the group. Consumer demand is strongly supported by good mortgage availability. We are mindful of the potential for economic uncertainty created by the outcome of the EU referendum. However, market fundamentals are robust, and we remain a housebuilder of choice.” |
| Forward sales over the period rose by 4.3% to £2.56bn, which was equal to 11,733 plots. Barratt said sales rates were weaker in London compared with the same point last year, but were strongly up in the northern and central regions. | Forward sales over the period rose by 4.3% to £2.56bn, which was equal to 11,733 plots. Barratt said sales rates were weaker in London compared with the same point last year, but were strongly up in the northern and central regions. |
| The housebuilder said it had taken a cautious approach in the immediate aftermath of the referendum, buying fewer sites than usual for the time of year, but it was on track to meet its full-year targets for land ownership. | The housebuilder said it had taken a cautious approach in the immediate aftermath of the referendum, buying fewer sites than usual for the time of year, but it was on track to meet its full-year targets for land ownership. |
| Thomas said Barratt was taking a “business as usual” approach following the referendum. “[The UK is] not building enough homes, so there is an opportunity for us to increase building and housing supply,” he added. | Thomas said Barratt was taking a “business as usual” approach following the referendum. “[The UK is] not building enough homes, so there is an opportunity for us to increase building and housing supply,” he added. |
| Barratt has 642 graduates, trainees and apprentices employed across the country, partly to address a sector-wide shortage of skilled labour in housebuilding. “We are also assessing, trialling and selectively implementing modern construction methods to reduce our dependency on certain trades,” the company said. | Barratt has 642 graduates, trainees and apprentices employed across the country, partly to address a sector-wide shortage of skilled labour in housebuilding. “We are also assessing, trialling and selectively implementing modern construction methods to reduce our dependency on certain trades,” the company said. |
| Shareholders will receive a record dividend of £248m – or 24.7p a share – on 21 November 2016, which includes a special dividend of £125m. Shares in the group were down just over 2% in early trading, at 472p. | Shareholders will receive a record dividend of £248m – or 24.7p a share – on 21 November 2016, which includes a special dividend of £125m. Shares in the group were down just over 2% in early trading, at 472p. |