Barratt predicts more home completions drop despite lower costs.

Barratt Developments, a leading UK developer, has announced a projected 7% decrease in home completions for the 2024-25 financial year, despite stable building costs. This revelation was made in the company’s latest trading update, citing high mortgage costs as a key factor in dampening demand. However, Barratt anticipates that build cost inflation will level off and expects to achieve a profit before tax that exceeds previous forecasts. In the previous financial year of FY24, Barratt completed 14,004 homes.
The official statement from Barratt mentioned, “Although the overall economic environment remains challenging, especially due to the impact of current mortgage rates and availability, as well as a decrease in average sales outlets, we predict that total home completions, including joint ventures, will fall within the range of 13,000 to 13,500 in FY25, with approximately 600 completions from our joint ventures.” Despite these projected numbers, the company remains optimistic about returning to growth in the subsequent year.
Furthermore, Barratt has voiced its support for the UK government’s renewed emphasis on housebuilding and planning reform, viewing these initiatives as crucial in stimulating economic growth and addressing the persistent shortage of new homes. The company expresses confidence in its ability to resume growth in the near future.
Additionally, Barratt is currently awaiting approval for its proposed £2.5 billion merger with Redrow. The merger is currently under scrutiny by the Competition and Markets Authority (CMA), and Barratt is eagerly anticipating a positive outcome.