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Barratt Homes predicts that its profits will double this year from UK housing boom

Housing

Barratt Homes is expecting to benefit from the latest UK housing boom and predicts pre-tax profits of around £390 million, with forward-sales expected to be up by 45% to £1.2 billion. Barratt Homes is the UK’s biggest house builder by volume and it has sold 14,838 homes in the past year, 8.6% up from the year before.

With the average house price climbing by 13% to £220,000 this reflects a shift towards building bigger, family orientated houses and also points to a strong UK housing market. Barratt’s chief executive Mark Clare said that sales were at their highest level for six years and that its order book was strong, predicting a forward sales increase of 45% to £1.2 billion.

Mr Clare said, “There is an awful lot of people who haven’t been able to buy for some time who are now very active in the market,” he said. “The recovery has extended beyond London and the south-east, and we are seeing increased confidence and activity in all the regional markets,”

Adding “This is a strong sign of a real economic recovery.”

The housing market has been recovering since the end of 2012 and has been boosted further by the government’s Help to Buy scheme launched in April 2013. This also allowed house builders to step up construction as well, with other house builders reporting increased figures in recent weeks.

Mr Clare also said that he welcomed the Bank of England’s move to rein in mortgage lending, saying that the move was ‘very sensible’. He said, “We want long-term stability,” adding “Ideal for us would be house prices running in line with wage inflation.”

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