LONDON, July 13 (Reuters) - Britain's largest homebuilder Barratt Developments on Thursday warned it would build far fewer homes this fiscal year as rising mortgage rates and stubborn inflation drive buyers away.
The FTSE 100-listed firm said it expected to build between 13,250 to 14,250 units in the year ending June 30, 2024, down from the 17,206 homes in the year before. Delivering at the mid point of the range would mark a drop of 20%.
Britain's housing market recovered from last year's financial turmoil following former prime minister Liz Truss' "mini-budget" economic plan. But higher borrowing costs have put renewed pressure on homeowners and buyers.
Chief executive David Thomas said in a statement that the trading backdrop had become more challenging in recent months, as many customers face significant cost of living pressures.
The group, which flagged significant macro-economic headwinds including persistent inflation and a higher interest rate environment, said reservations slowed beyond the normal seasonal trends from mid-May to the end of June.
The rate of weekly bookings per Barratt site in the 2023 financial year stood at 0.55, down 32.1% year-on-year while first time buyer bookings slumped 49%.
Its forward sales position - a key metric gauging the housing demand - declined to 2.22 billion pounds ($2.89 billion) as at June 30, compared with 3.62 billion pounds a year ago.
Barratt expects adjusted profit before tax for fiscal 2023 to be in line with current market expectations.
Reporting by Suban Abdulla in London and Aby Jose Koilparambil in Bengaluru; Editing by Sherry Jacob-Phillips and Kate Holton
Source: Reuters