Print friendly version 8 Sep 2010

Housebuilder warns of mortgage shortage

Barratt Developments, one of the UK’s leading housebuilders, has warned that an ongoing lack of mortgage funding continues to threaten the industry.

The group acknowledged that housing market conditions have improved markedly throughout the course of 2010, but pointed out that the number of housing transactions being carried out is still ‘extremely low’ compared to normal.

Home buying and selling activity continues at less than 50% of the pre-credit crunch level.

Barratt said that market conditions had forced it to build fewer sites, which would do "little to address the nation's fundamental housing shortage".

The group issued the warning as it revealed a pre-exceptionals loss of £33m in the year ending June 30, compared to  a £144m loss last year, and marginally better than analyst expectations for a £38m loss.

Barratt said it had gained  from a 10.9% rise in its average selling price to £174,300 over the financial year, primarily due to a move away from flats to houses.

Chairman Bob Lawson said: "The key restriction on the industry remains the availability of mortgage finance.

"Whilst there was some improvement during the year, the lack of availability of suitable higher loan to value products continued to restrict the new build sector where customer deposits have traditionally been lower."


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