Barratt firmly on track despite help to buy headwinds
FTSE 100 Housebuilder Barratt Developments issued a trading update this morning
What they said
The positive start to the new financial year has continued in recent weeks with private reservations remaining strong
We remain on track to deliver both our FY22 and medium term targets set out in the FY21 results
There has been a significant year on year reduction in Help to Buy reservations
We have not experienced any significant disruption to our build programme as a result of the challenging supply chain environment.
Barratt issued a positive trading update this morning, but flagged that changes to Help to Buy have had more impact on its business than changes in Stamp Duty. Following the introduction of regional price caps and limiting Help to Buy to first-time buyers Help to Buy accounts for 21% of sales so far this year compared to 51% in the previous financial year and the scheme is scheduled to close in March 2023.
However, the overall forward order book is larger in both volume and value than it was last year and remains on track to deliver results this year in line with the market's expectations. So far Barratt is taking the transition away from Help to Buy in its stride.
The challenges to the supply chain are on the radar but not yet impacting results and build programs and we hope this remains the case, but it does add an element of uncertainty going forward
One thing, however, is certain, the demand for new homes is strong and we are not building enough homes to meet demand. Housebuilders such as Barratt are in the right place at the right time.