July 6, 2020 / 7:02 AM / a month ago

Homebuilder Barratt's volumes drop by a third, but order book thickens

FILE PHOTO: A Barratt homes sign is seen at a Barratt housing development near Haywards Heath, Britain, February 20, 2020. REUTERS/Peter Nicholls

(Reuters) - Barratt Developments (BDEV.L) said on Monday its deliveries had fallen by a third as the coronavirus crisis halted construction activity, though the British homebuilder added that it was starting the new financial year with “cautious optimism”.

While completion volumes slipped to 12,604 homes for the period ended March 22 from 17,856 homes a year earlier, the UK company’s forward order book carried a value of 3.25 billion pounds ($4.06 billion) as at June 30 versus 2.60 billion pounds in 2019.

“Since the removal of government restrictions on housing market activity on 13 May 2020 there has been a welcome recovery in internet activity, site visitors and net reservations across both the industry and our business,” Barratt said.

However, Britain’s largest housebuilder warned that the prospects for the wider UK economy and the subsequent impact of the pandemic on the housing market remains uncertain.

Although the government relaxed restrictions on the housing market in mid-May, data published by the Bank of England last week pointed to the lowest number of mortgage approvals on record during the month.

Barratt acknowledged that the availability of higher loan-to-value (LTV) mortgages was at a reduced level, but said demand from first-time buyers looking to use the government’s help to buy has been significant since the market reopened.

Shares were indicated to open 3% higher as per traders, following a Times report that finance minister Rishi Sunak has drawn up plans to exempt most homebuyers from paying any stamp duty to kick-start the country’s economic recovery.

Reporting by Muvija M in Bengaluru, Editing by Sherry Jacob-Phillips

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