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Barratt reports strongest spring for five years

Barratt Developments has had its strongest spring selling season for five years, it said today.

The housebuilding firm’s interim management statement for the 18 weeks to 6 May 2012 said average weekly net private reservations - the amount of deposits put down for built-to-order homes - were up by 25 per cent compared with last year. This has been driven by higher sales rates and increased site numbers.

The value of private forward sales is up by 16 per cent to £827.9 million.

Group chief executive Mark Clare said the firm had its “strongest spring selling season for five years”.

Social housing completions were also ahead of last year’s and are expected to be 22 per cent of all full-year completions.

Private average selling prices on completitions increased by 5 per cent, although the average is expected to drop in the second half of 2012.

Shared equity schemes, such as FirstBuy and Kickstart, remained an important selling tool due to mortgage finance restrictions and is predicted to be used on around a fifth of completions in 2012.

However, around 1,600 customers have registered with Barratt through NewBuy, a government scheme launched on 12 March that offers up to a 95 per cent loan to value mortage. There have been around 70 reservations to date using the scheme.

The statement said: “We would expect this rate to increase as we start to prioritise it as a sales tool and all the major lenders enter the market.” As a result, Barratt expects to see a “significant decrease in the dependence of the group on shared equity”.

Net debt at 30 June 2012 is expected to be around £275m, but recent investment in higher margin land means the firm expects to “continue to drive up profitability and bring down debt over the next few years.”

The statement added: “Whilst the economic outlook remains uncertain and the availability of mortgage finance continues to be a restraint, we expect the benefits of the various government initiatives to continue to provide support to the industry.”

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