Barratt Developments provided much-needed cheer for the housebuilding market yesterday when it revealed that it had enjoyed its best spring selling season for five years.
Weekly net private reservations were up 25 per cent, with demand underpinned by shared equity schemes and Government initiatives, which helped compensate for a shortage in affordable mortgages.
Only 70 homes had been reserved under the NewBuy scheme, which sees the Government underwrite losses to encourage the return of 95 per cent mortgages, but it expects this rate to increase and believes the initiative will prove positive for the industry.
Barratt said it was “encouraged” after 1,600 customers a week had registered with it since the scheme’s launch.
The strong sales figures allayed fears that demand for homes would drop off after a stamp duty holiday ended in March.
Average selling prices rose five per cent to £202,000 as it built more family homes in London and the south east where the market has been more robust but underlying prices remained stable.
Barratt shares rose yesterday, while other housebuilders, including York-based Persimmon and Taylor Wimpey, were also boosted by its upbeat statement.
Chief executive Mark Clare said: “We have had our strongest spring selling season for five years.
“Our overall pricing levels have been maintained and average weekly net private reservations in the period are up 25 per cent compared to last year.
“As a result we’re ahead on achieving our objectives of improving profitability and reducing net debt.” The group said it now expects 12.600 completions in the year to June, 600 more than it previously forecast.
Shared-equity schemes remain an “important selling tool” amid the mortgage drought and accounted for 22 per cent of completions in the 18 weeks to May 6. Of these, some three-quarters came from the Government-backed FirstBuy scheme.
Around 20 of its sites have been shortlisted for funding for the Get Britain Building Programme, which aims to help sites where activity has stalled. Barratt operated from around 400 sites at the end of December last year. It plans to open about 20 Yorkshire sites during 2012, including schemes in Hull, Howden, Whitby, Castleford and Wakefield.