Barratt Developments – Private Market Remains Robust

Barratt Developments – Private Market Remains Robust
sergeitokmakov / Pixabay
  • Barratt Developments PLC (LON:BDEV)’s otal completions returned to pre-pandemic levels, with 17,908 completed over the year
  • Build cost inflation ran at 6% over the year, though currently trending at 9-10%
  • Average selling price for private homes up to £341,000, rising to £375,400 for those sold in the forward order book
  • Underlying profit before tax expected slightly ahead of expectations, between £1.05bn-£1.06bn
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Q2 2022 hedge fund letters, conferences and more

Barratt Developments’ Results

Matt Britzman, Equity Analyst at Hargreaves Lansdown

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“Another housebuilder, another set of results pointing to resilient housing demand. Completions were slightly lower than expected but came in ahead of pre-pandemic levels. More crucially though, demand looks to be holding up in the forward order book despite rising house prices. Testament to the ongoing resilience of the private house buyer, seemingly undeterred by a drop in real income as inflation and a cost-of-living crisis start to take their toll.

There was weakness in the affordable housing segment, these buyers are most likely to be impacted by a stretch in affordability, with forward sales down both in value and volume.

It almost feels inevitable that a broader easing of demand is on the cards given the wider conditions and news that build costs are running 9-10% higher at the minute is a little hard to stomach. Nonetheless, Barratt’s doing all it can to make hay while the sun shines, with a significant increase in the value of land buying last year – propped up by a very healthy net cash position on the balance sheet. Not for the first time, planning delays are being called out as a headwind – not something housebuilders want to battle with given everything else that’s going on.”


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Updated on Jul 14, 2022, 5:06 pm

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