Barratt Developments Plc reported bigger profits and margins as the UK’s house price boom continues to defy inflation and rising rates. Below the surface though, there are signs of a slowdown.
(Bloomberg) — Barratt Developments Plc reported bigger profits and margins as the UK’s house price boom continues to defy inflation and rising rates. Below the surface though, there are signs of a slowdown.
The homebuilder has begun to reduce investment in new land acquisitions, echoing a move by peer Berkeley Group Holdings Plc, according to a statement Wednesday. Instead it will return as much as £200 million ($230 million) to shareholders through a buyback program through June next year.
And while the number of homes sold by the group is up on a year ago and prices continue to rise, the average weekly number of homes reserved at each of its sales sites was down sharply over the summer compared to a year earlier. Its also lower than the equivalent period before the pandemic struck.
It’s a closely watched metric for homebuilders that helps strip out kinks caused by the timing of project starts.
“There has been a more challenging current trading environment since the 1st of July,” Chief Executive Officer David Thomas said in a telephone interview. “We recognise that consumer confidence is low.”
More stories like this are available on bloomberg.com
©2022 Bloomberg L.P.
