Property market showing early signs of recovery, says Barratt

The housing market is showing early signs of recovery following a sharp slowdown, according to the UK’s biggest housebuilder.

Barratt Developments said there were ‘encouraging’ signs of a turnaround after the turmoil sparked by Liz Truss and Kwasi Kwarteng’s disastrous mini-Budget last September.

The FTSE 100 firm welcomed a ‘significant’ rise in reservations, the number of people signing up for new houses, last month.

Reservations down: Barratt Developments has revealed its net reservation levels slumped by 45% in January

But boss David Thomas said it was ‘early days’, with challenges remaining for first time buyers.

Reservations fell in the wake of the mini-Budget, which caused mortgage rates to spike. Buyers were also put off by fears of a house price crash and inflation.

Barratt’s reservations fell almost two-thirds in the last three months of 2022 but bounced back in January as confidence was restored. 

Thomas said: ‘The economic and political outlook seems better.

‘The cost of living and energy crisis has ended up being slightly less bad than people thought it might be. 

‘We have seen reductions in mortgage rates since October and while there have been reductions in house prices, they have been more muted than expected.’

The shares rose 1.7 per cent, or 7.8p, to 467.9p after it sold 8,626 homes in the six months to December 31 – 559 more than the same period a year earlier. 

Revenue rose almost a quarter to £2.8billion, while half-year profit rose 15.9 per cent to a record £501.5million.