Proactive Investors - Barratt Developments PLC (LON:BDEV) reported a further easing in housing market conditions in June and forecast a fall of more than 20% in home completions in the coming year, though profits for the past year were as expected.
The housebuilder said adjusted pre-tax profit in the year to 30 June 2023 should be in line with current market expectations, where analysts on average forecast adjusted profits before tax of £880.6mln.
“We experienced a significant deterioration in demand during the second quarter and, whilst the position improved during the third quarter, reservations then slowed more than normal seasonal trends from mid-May to the end of June 2023,” the firm said.
Total home completions in the past year fell 3.9% to 17,206 and the firm expects this number to fall to 13,250-14,250 in the financial year to June 2024.
Net reservations for new homes dropped 32% to 0.55 per outlet per week and there was a 49% slump in first-time buyer reservations following the end of Help to Buy and increases in mortgage interest rates.
The order book is retreating to more “typical levels”, Barratt said, reporting total forward sales at 30 June of 8,995 homes, down from 13,579 a year ago.
Barratt expects to make a further £40mln provision in relation to the Citiscape-associated review.