Britain’s biggest home builder has become the latest in a long line of firms to warn of tough times ahead in the housing business.
Barratt Developments warned of difficult trading conditions over the coming months after it posted a fall on annual profits.
Cost of living dragging down demand.
Like many in the industry, Barratt Development feels high mortgage rates and the lingering cost-of-living crisis is deterring many from investing in a roof over their heads.
It believes construction rates and house prices have slid in the last few months.
Barratt said the UK housing market remained difficult with the outlook uncertain, adding that it expected average sales sites to reduce by around 6% in the current fiscal year.
Forward sales down 36%.
The company said forward sales – a key industry metric which gauges housing demand – stood at 2.44 billion pounds ($3.07 billion) as of Aug. 27, down 36% from a year earlier.
The FTSE 100 listed builder said its pre-tax profit was £884.3 million for the year ended June 30. This is compared with a company-compiled analyst consensus of £882 million pounds.
Mortgage lender also warns of hard times.
This is one of many warnings from within the housing industry in recent months.
Mortgage lender Nationwide said UK housing prices fell by the most since 2009 in the 12 months to July. It blamed rising interest rates.
Compared with July last year, the average house price was down 3.8% after a 3.5% annual fall in June, Nationwide said.
Other gauges of the housing market point to weak activity caused by rising interest rates. These pushed mortgage rates above 6% for home buyers and existing mortgagors looking to refinance.
