© Reuters Barratt Earnings Show Signs of Cracks in the UK Housing Market
(Bloomberg) —
Barratt Developments (LON:) Plc is seeing strains appearing in the UK property market as the cost-of-living crisis and soaring mortgage rates start to bite.
The homebuilder said private reservations, the average weekly number of homes reserved at its sales sites, has dropped to 188 in the last quarter, the company said in a statement Wednesday. That’s down from a weekly average of 281 during the year through June.
The metric is closely watched for homebuilders and it helps strip out kinks caused by the timing of project starts. Barratt also reported a 13% year-on-year dip in total forward sales to 13,314 homes.
“The outlook for the year is less certain with the availability and pricing of mortgages critical to the long-term health of the UK housing market,” the company said in the statement.
Still, the company says it remains on track to deliver adjusted pre-tax profit for the year in-line with its full-year guidance.
The average five-year fixed rate mortgage on a home rose to 6.29% on Tuesday, the highest since November 2008 and up from 5.75% a week earlier, according to Moneyfacts Group Plc. That’s as the two-year fixed-rate deal climbed to 6.43%, the most since August 2008.
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