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A company logo is seen on a banner outside the Barrett Homes housing development in Warrington, Britain, August 23, 2023. Reuters/Phil Noble/File Photo Obtain Licensing Rights
Sep 6 (Reuters) – Britain’s biggest homebuilder Barrett Developments (BDEV.L) on Wednesday flagged tougher trading conditions in the coming months after reporting a fall in annual profit as higher mortgage rates and the cost of living drag on. Due to which there has been a decrease in demand.
Affordability concerns stemming from high mortgage rates and a prolonged cost of living crisis have put pressure on the UK housing market, with indicators on everything from mortgage demand to construction rates and falling prices in recent months.
Barrett said the UK housing market remains difficult and the outlook uncertain, adding that average sales sites are expected to fall by around 6% in the current financial year.
The company said further sales – a key industry metric that measures housing demand – stood at 2.44 billion pounds ($3.07 billion) as of August 27, down 36% from a year earlier.
The FTSE 100 (.FTSE) listed builder said its pre-tax profit for the year ended June 30 was 884.3 million pounds, compared with the company-compiled analyst consensus of 882 million pounds.
Mortgage lender Nationwide said on Friday that British house prices in August were 5.3% lower than a year earlier, their biggest annual drop since July 2009.
Property website Zoopla last week forecast the number of home buyers in the UK would fall by 21% this year, to the lowest since 2012.
“While we expect the backdrop to remain difficult in the coming months, we are a resilient business with a strong balance sheet,” CEO David Thomas said in a statement.
“We expect a moderate recovery in FY2025 and further improvement next year with our new FY26 estimates,” Credit Suisse analysts said after cutting their 2024 earnings-per-share estimates on weak margins and higher expenses. are supposed to.”
($1 = 0.7950 pounds)
Reporting by AB Jose Koilparambil and Yadarisa Shabong in Bengaluru and Suban Abdullah in London; Editing by Subhranshu Sahu and Christopher Cushing
Our Standards: The Thomson Reuters Trust Principles.
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Source: www.reuters.com
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