Barratt says housing market improves

By Miyoung Kim

LONDON (Reuters) - Housebuilder Barratt Developments (BDEV.L) reported a 14.3 percent rise in six-month underlying profit on Wednesday and said housing market conditions had since improved, lifting its shares 4 percent.

The second-largest homebuilder by volume, and number three by market value, said profit before tax and restructuring costs rose to 201.8 million pounds in the six months to end-December.

"The new calendar year has started well. We have increased outlets, and have a strong forward order book. Visitor and reservation levels continue to improve, and we remain optimistic that this will continue through the balance of the spring selling season," it said in a statement.

Barratt follows rival Persimmon (PSN.L) in citing improved market conditions after global financial market turmoil cooled Britain's decade-long housing market boom late last year as banks cut mortgage lending and buyer confidence slumped.

The market has since steadied, with data showing improved mortgage approvals and lending. But few economists expect a rapid recovery, believing the Bank of England, which cut interest rates in December and February, is unlikely to ease again for a few months.

"Action is being taken by the management to address the tough housing market conditions, and this has resulted in a better-than-expected forward sales level," Landsbanki analyst Simon Brown said.

"The outlook for the second half remains difficult but ... is more positive in sales terms than we had predicted."

Shares in Barratt, which had more than halved over the past six months and was dropped from Britain's blue-chip index in December, were up 2.5 percent at 434-1/2 pence by 9.15 a.m., having risen as high as 445p earlier in the morning.