Barratt Developments set to report profits ahead of previous expectations

Barratt said in July that home completions fell to 14,004 in the year to June 30, and that home completions are set to fall to between 13,000 and 13,500 in 2024-25.

The projected fall comes despite respite from soaring building costs and Labour’s pledge to cut planning red tape.

Chancellor Rachel Reeves has said the Government will restore mandatory housebuilding targets for local authorities as part of the drive to build 1.5 million homes over five years, which is expected to help builders.

But Prime Minister Sir Keir Starmer warned last week that the Government’s forthcoming Budget will be “painful”, sending housebuilders’ shares down.

He said “things are worse than we ever imagined” because of a £22 billion “black hole” in the public finances, and said he found out in recent weeks that the Tories had borrowed almost £5 billion more than the Office for Budget Responsibility expected.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “While Barratt Development’s foundations look solid, there are niggles of worry about the trajectory for the housing market.

“Reservation rates and buyer sentiment appear to be improving, and there is fresh hope that the issues tying housebuilders’ hands can be unwound with reform of the current planning rules looking key to an uplift in activity.

“However, the latest downbeat assessment of the UK’s finances by the new Government sent a wobble through housebuilding stocks amid concerns that it could prompt fresh wariness among buyers.

“Already fewer homes being sold, and at reduced prices, have meant less cash coming in the door. And incentives used to boost sales have also weighed on margins.

"A further easing of mortgage rates will be needed if activity is to pick up significantly.”

Meanwhile, on September 5, Vistry will report its half-year results, when analysts expect underlying operating profit to rise around 10 per cent to £227 million, helped by increased sales volumes and lower building material costs.

And Berkeley Group will update investors on September 6, when analysts expect an update on whether previous guidance of £525 million pre-tax profit for the coming year is on track.

In June, Berkeley said it had improved its outlook for the year despite “challenging” conditions across the housing market.

In a statement for investors, the company said in June that it had been impacted by interest rates remaining at high levels for longer than expected, but stressed there are “signs that the outlook is improving”.