Barratt conforms weak autumn property market

The company reports that underlying selling prices have remained stable during the period, while total average selling price on completions increased by c. 9% to £180,000.
Total completion revenues also increased by c. 9%, driven by relatively flat completion volumes and a significant increase in ASP compared to the prior year equivalent period. Total forward sales were in line with the prior year at £870.9m Barratt expects conditions for the UK housing market to remain challenging and sees constrained mortgage lending combined with weaker consumer confidence as the key obstacles to significant recovery. Reflecting this, net private reservations per active site per week were down in the period at 0.45 (2009: 0.55). The company anticipates limited volume growth in 2010, driven by new site openings. In October 2010 Barratt entered into a joint venture with London & Quadrant Housing Trust to acquire a site on the edge of the City of London which will provide 235 residential units. In addition to a 50% share of the profits, Barratt expects to receive a management fee for construction and marketing services. L&Q will provide the equity to finance the cost of land.
Mark Clare, Group Chief Executive commented, “Our strategy continues to be value and quality focused in a market where customers are taking longer to commit to house purchases. Whilst the autumn selling season has been weaker than anticipated, our encouraging performance on price is expected to drive margin growth for the year.”
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