The chief executive of Barratt Developments, Britain’s largest housebuilder, described the UK’s planning system as “ineffective” while revealing that the value of the company’s order book had fallen by more than a third.
David Thomas also warned that the group expects conditions to “remain difficult in the coming months.”
The industry faced difficult conditions in 2023, with demand dampened by higher borrowing costs and rising mortgage bills. The abolition of the Help to Buy scheme has also made it harder for many people to get onto the property ladder.
Thomas told the Evening Standard: “A number of buyers, particularly first-time buyers, have postponed their purchase decision. London and the South East are where we have experienced some of the greatest challenges and affordability is a key factor in this.”
As of August 27, Barratt’s total order book stood at £2.4 billion (9,608 homes), down from £3.8 billion (14,058 homes) the previous year.
The number of completed house sales in the year to June 30 fell 3.9% to 17,206, although sales rose 1% to £5.3bn and profit before tax rose 9.8% to 705.1 £ million rose.
Adjusted profit before tax, which excludes one-off items mainly costs related to cladding work, fell 16.2% to 884.3 million.
The company stuck to its July forecast for home completions for the year to June 2024, which was between 13,250 and 14,250.
Thomas said it had been a solid operational performance in a challenging environment, adding that Barratt was resilient and had a strong balance sheet.
Thomas also used the update to point out that the FTSE 100 company “has struggled with its ineffective planning system over the past year.”
He added: “New developments are increasingly constrained by an ineffective planning system.”
He said there were a number of problems, including underfunding of local government planning departments.
https://www.standard.co.uk/business/barratt-developments-homes-mortgage-cost-of-living-crisis-b1105131.html Barratt expects the home order book to fall as conditions remain difficult