Barratt Developments, a leading house builder, has reported a 10% decrease in its private reservation rate at the beginning of fiscal 2024. Despite the challenging business environment, the company remains optimistic about meeting its home completions guidance for the full year.
As of October 8th, Barratt’s order book stood at £2.36 billion, showing a decline from £3.60 billion compared to the previous year. The order book currently represents 9,221 homes, a decrease from the previous year’s 13,314.
During the period between July 1st and October 8th, the average number of net private reservations per week was 169. This is slightly lower than the previous year’s figure of 188. Barratt attributes this decline to mortgage challenges faced by potential home buyers and the absence of reservation activity due to the UK government’s Help to Buy program.
Despite these challenges, the company has already forward-sold 60% of its expected private-home completions for fiscal 2024, lower than the 70% recorded in the previous year. Barratt emphasizes that its full-year outlook remains uncertain, with the availability and pricing of mortgages playing a critical role in the market’s long-term health.
In light of the current market conditions, Barratt expects its wholly-owned completions for fiscal 2024 to be within the previously guided range of 13,250-14,250 homes. This forecast is lower than the 17,206 homes completed in fiscal 2023, which included joint ventures.
Chief Executive David Thomas states, “Against this backdrop, we are focused on driving revenue whilst continuing to manage build activity and carefully control our cost base.”
Although challenges lie ahead, Barratt Developments remains committed to navigating the market and achieving its goals.
