Housing slide hits Barratt profit

By Simon Meads

LONDON (Reuters) - A slide in the housing market led builder Barratt Developments to cancel its final dividend on Wednesday after underlying annual profit fell 13 percent and it warned that the market remained difficult.

"There is little prospect for any material improvement in trading conditions until mortgage finance and customer confidence return," chief executive Mark Clare said.

Latest monthly data from HBOS, Britain's biggest mortgage lender, showed house prices fell for the seventh month running in August to stand 12.7 percent lower than a year earlier, a sign the property downturn has turned into a crash.

More than 25,000 pounds has been wiped off the value of the average British home in the past year as the economy came to a standstill and the global credit crunch bit.

Clare told reporters on Wednesday the group had successfully completed a 400 million pound refinancing, with a new covenants package also in place until 2011. However, he warned the total interest cost on the finance package had increased around 2 percentage points to 9.5 to 9.75 percent.

Rival housebuilder Redrow also announced a new finance package on Tuesday, which took its effective interest rate up 2 percentage points to around 8.5 percent.

Barratt shares were down 1.8 percent at 155.75 pence at 10:10 a.m., following results that brokerage Panmure Gordon said did not contain many surprises.

Barratt made a pretax profit before exceptional items of 392.3 million pounds in the year to end-June. It announced landbank write-downs to the tune of 208.4 million pounds as the group's underlying selling price dipped 5 percent.