Barratt says this year is already sold out as housing boom continues

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Barratt Developments PLC (LON:BDEV) said it has sold out of houses for this year already as it raised its profit expectations for 2021.


Britain is enjoying a housing boom currently fuelled partly by a recovery from the Coronavirus pandemic but also a stamp duty holiday that starts to taper off later this year.


David Thomas, chief executive, said trading had been strong in the four months to 2 May 2021 and it was increasing its build rate to meet demand.


“We now expect to increase wholly owned completions to between 16,000 and 16,250 homes this year, along with around 650 JV home completions.”


“As a result, we now expect an outturn for the full year modestly above the board’s previous expectations,” it said in a statement.


Forward sales are worth GBP3.70bn, Barratt added, compared with GBP3.37bn over the same period in 2019, while weekly sales reservations had ticked up to 0.83 from 0.79 before the impact of the pandemic.


One potential worry is that costs are rising said the builder, with increases currently running at 3% though at present it still expects build cost inflation will be in the range of 1% to 2% for the year overall.


Barratt added it had incurred a cash charge of GBP31mln for rectifying problems at the Citiscape development in Croydon, which it said was in line with its provisions.


The builder added that including Citisdcape it has spent GBP163mln on remedial and other cladding repairs since 2018, with a further GBP85.6mln to be spent, which is its best estimate of the extent of future work required.


At the end of April, the group had net cash of GBP1.08bn and an undrawn credit facility of GBP700mln.

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