House builder Barratt says housing demand hit by mortgage affordability
Britain’s biggest house builder has warned that demand for new homes has been impacted as potential buyers struggle with the rising cost of mortgages.
Barratt Developments said “short-term demand has been impacted by mortgage affordability challenges” and that it was reducing construction in response.
Barratt made its announcement a year to the day after Liz Truss became Prime Minister with Kwasi Kwarteng as chancellor.
Their mini budget threw financial markets into turmoil – with the promise of unfunded tax cuts leading to a sharp increase in interest rates and mortgage rates linked to them.
Barratt said it had responded to conditions by implementing a “headcount freeze” that cut employee numbers by six per cent, or about 400 jobs, to around 6,000.
Figures released this week show Barratt built 17,206 homes in the year to 30 June, down 3.9 per cent on the year before.
And it said it plans to slash the number of houses it builds in the latest financial year to between 13,250 and 14,250 – around a fifth.
Its cost-reduction plan helped the company to increase its profit margin to 18.3 per cent. Its profit before tax for the year was £705 million.
Pictured: The Orchards Rise development at Wichelstowe, Swindon.