LONDON (Alliance News) - Housebuilder Barratt Developments PLC said Thursday it continues to trade well in 2014, with an increase in net private reservations and sales during the period, amidst recovery for the UK's housing market.
In an interim management statement for the period January 1 to May 4, the residential property development group said net private reservations were up 25% at 0.71 per active site compared with 0.68 per active site in 2013.
At May 4 the company said total forward sales were up 47% to GBP1.92 billion compared with GBP1.31 billion in 2013 equating to 9,382 plots, up from 7,155 plots.
Private forward sales, excluding joint ventures, were up 51% to GBP1.53 billion compared with GBP1.01 billion in 2013, equating to 5,703 plots compared with 4,373 plots. Joint venture private forward sales, which are predominantly based in London, stood at GBP182.7 million, up from GBP117.2 million in 2013, equating to 326 plots compared with 247 plots.
FTSE 100-listed Barratt said the UK government's Help to Buy equity scheme remains a very attractive opportunity for its customers and, in particular, is supporting first-time buyers. In the period, 2,150 of its reservations used the scheme.
The first part of the scheme, which is now a year old, makes buyers of newly built homes eligible for a 20% equity loan from the UK government on top of their 5% deposit. It has been extended by four years to 2020. The second phase, which has not been extended, started in the Autumn last year and guarantees a portion of a buyer's mortgage for new and existing homes.
Barratt said the UK land market remains attractive, and it continues to secure "excellent" land opportunities across all regions. It expect around two-thirds of completions in the current financial year to come from its newer high-margin land, increasing to around 79% in the full-year 2015.
"We remain disciplined in our approach to land buying with our minimum hurdle rates set at a 20% gross margin and 25% return on capital employed, assuming no future house price inflation," it said.
Looking ahead, the company said it expects to deliver a very strong performance for the full year to June 30, while also being very well positioned for the full year 2015.
Barratt was quoted at 383.30 pence Thursday morning, up 7.00 pence or 1.9% making it the third biggest gainer in the FTSE 100.