North East-founded Barratts Developments reports strong trading update

Help to Buy is continuing to bolster sales at housebuilder Barratts Developments

Barratt Housing chief executive Mark Clare

North East founded housebuilder Barratt Developments has issued a trading update for the 18 weeks to May 4, indicating a continuation of strong sales performance.

The company reported net private reservations are up 24.6% at 0.71 per active site per week for the financial year to date, and total forward sales as of May 4 are up by 46.5% to £1,92bn, compared to £1.32bn in the same period in 2013.

The firm said it is also continuing to secure excellent land opportunities across all regions, making it confident is will deliver its ROCE (return on capital employed) target of 18% for 2016 significantly ahead of schedule.

The board said increased buyer confidence and the availability of attractive mortgage finance continue to support strong consumer demand for the firm’s homes.

It said the Government’s Help to Buy equity scheme remains a very attractive opportunity for customers and, in particular, is supporting first time buyers.

In the period, 2,150 of reservations used the scheme.

Mark Clare, group chief executive said: “The improvements in our operational performance have been embedded in the business and will continue to serve us well in a stronger market.

“Our focus is now on financial year 2015, and by June we expect to have secured more than 25% of our financial year 2015 private sales.

“Our disciplined approach to land buying will enable us to maintain an owned landbank of around 3.5 years and will support a significant increase in profitability and return on capital employed.”

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