Barratt Redrow has reported softer private home reservations in recent months, as affordability pressures continue to weigh on prospective buyers. The UK's largest housebuilder also revealed that home completions fell during the first four months of the financial year.
Resilient trading amid challenging conditions
Chief executive Dean Banks said: "Our trading performance in the first 17 weeks of the financial year has been resilient against a backdrop of challenging market conditions, with continued pressure on affordability. While the underlying private reservation rate has been softer, we have seen stronger demand from the private rental sector."
The firm disclosed that its underlying private reservation rate dropped to 0.53 for the 17 weeks to October 25, down from 0.57 over the same period the previous year. However, the total reservation rate edged upwards to 0.59 from 0.57 year-on-year.
Completions fall, order book grows
Barratt Redrow, which is based in Coalville and has a key support office in Flintshire, also posted home completions of 3,223 for the 17-week period, a notable decline from 3,665 recorded during the same period last year. The group's order book, meanwhile, expanded to £3.32 billion, rising from £3.28 billion a year earlier.
The trading update follows an autumn Budget in which the Government unveiled a new First Time Buyer ISA and Your First Home scheme, both designed to help aspiring homeowners onto the property ladder.
Government schemes welcomed
Mr Banks said: "We welcome the Government's 'Your First Home' scheme and its support for first-time buyers. Alongside planning reform, the scheme has the potential, over time, to support increased housing delivery."
Chris Beauchamp, chief market analyst at IG, commented: "Traders are focusing on the improvement in Barratt's order book, even if it is relatively slight. But it is sufficient to overcome the negative performance in recent months."
