Barratt order book down £½bn
A sharp drop in sales has slashed almost half a billion pounds off the forward order book of Barratt Developments, the housebuilder revealed Wednesday.
The group's forward order book currently stands at about £1.56bn versus £2.1bn a year ago following a 7.6% slide in housebuilding revenues during the 19 weeks to 11 May to £825m.
Completions are down 5.5% since the start of the year, while net private reservations per week averaged a "disappointing" 276 over the period, 33.6% lower than the year before.
Barratt noted a significant drop in net private reservations per week since the end of March, with an average of 206 over the last six weeks.
It said cancellation rates since the beginning of 2008 have run at around 25%, roughly in line with the medium term average, although there has been an increase over the last month and a half.
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The significant deterioration in market conditions since the end of March has forced the business to be selective about which sites is starts, so the number of sites is expected to decline in the next financial year.
The firm blamed an unprecedented reduction in mortgage availability and tightening lending criteria, combined with a decline in consumer confidence.
"Despite the deterioration in current trading conditions, we expect to deliver a satisfactory outcome for the current financial year," said chief executive Mark Clare.
"We do not expect to see a meaningful upturn in the housing market until there are improvements in the availability of mortgage finance."
