Barratt set for bumper year amid record completions

David Thomas

David Thomas

Housebuilder Barratt Developments said it expects full year profit to reach the top end of market expectations as it forecasts its highest rate of completions this year since the financial crisis.

Supported by strong demand for homes, low borrowing costs and government schemes, such as Help to Buy, Barratt sees total completions at 17,350 for the year – the highest level in nine years.

As a result, fiscal year 2017 pre-tax profit is likely to meet the upper end of estimates of £733 million, it said in a trading update today.

Total forward sales, including joint ventures, on 7 May were 12.7% higher on the same time a year ago at a value of £3.2 billion, compared to £2.8bn last year. This equated to 12,822 plots, up from 11,605 plots in 2016.

Since the start of the year to 7 May, the company has launched 46 new developments, including joint ventures.

Barrat’s overall sales rate edged up to 0.8 from 0.78 last year as net private reservations per average week rose to 299 from 282.

The group said it continued to see upward momentum in private average selling prices, helped by house price inflation and changes in its mix.

Chief executive David Thomas said: “This has been another strong period both operationally and financially for the group. We remain firmly committed to delivering industry leading build quality and customer service, recognised by the award of the Home Builder Federation’s maximum five star customer satisfaction rating for the eighth consecutive year.

“Our controlled approach to growth means we are on track to deliver 17,350 completions in the year, the highest number of completions in nine years. This, combined with the strong market backdrop, means we now expect full year profit before tax to be at the top of the range of current analyst estimates.”

Scottish housebuilders achieve 5 star customer satisfaction rating

The Hailes in Haddington by McCarthy & Stone

The Hailes in Haddington by McCarthy & Stone

Stewart Milne Homes, Barratt Developments in Scotland and the Scotland team at McCarthy & Stone are celebrating after achieving 5 star ratings in the new Home Builders Federation (HBF) customer satisfaction survey 2017.

The prestigious independent industry accolade recognises companies who achieve over 90% customer satisfaction ratings customers who purchased a home in the last year.

One of only five large housebuilders (building over 750 units per annum) and the only major housebuilder head-quartered in Scotland to be awarded the status this year, Stewart Milne Homes said its continued commitment to customers, the creation of award winning developments, the design, detail and individuality of homes and aftercare service has led to the achievement.

Glenn Allison, chief executive of Stewart Milne Group, said: “This award recognises the company-wide effort in the planning, construction, marketing and sales of our homes in Scotland and England. But more importantly, it provides an independent assurance on the quality of our homes and the service we provide to home buyers.

“We have worked extremely hard to achieve our five star status and we are proud to have been awarded this accolade, especially as it comes from our customers views. We will continue to deliver quality homes backed up by exceptional customer service.”

The award for Barratt Developments in Scotland, which includes both Barratt and David Wilson Homes, means that Barratt now becomes the only major national housebuilder to be accredited as a 5 star builder for eight years in a row.

Barratt Developments in Scotland said it continually puts customers at the heart of everything it does by building high quality homes with great design that create strong communities. Coupled with the focus on looking after customers after they have moved in, it is this which has helped achieve such high customer recommendation scores.

Douglas McLeod, regional managing director for Barratt Developments in Scotland, said: “We are extremely proud to achieve the 5 star rating for eight years in a row as it means more than 90% of our customers would recommend our homes to a friend. The customer recommendation scores come from building high quality homes and then really looking after our customers once they have moved in.

“Quality is so important to us there are over 400 items that are individually checked before the keys to a Barratt home are handed over to a customer. We try to work harder than anyone else when it comes to looking after our customers, and this comes out in the survey’s results.”

Retirement housebuilder McCarthy & Stone becomes the only housebuilder of any size or type to achieve the award for twelve years running, which is every year since the awards began.

According to the firm, the award recognises its commitment to delivering excellent customer service across the business, with particular emphasis on the developer’s commitment to guiding home buyers through the purchasing process, including the provision of post-sales support.

Lorraine Paterson, sales and marketing director at McCarthy & Stone in Scotland, said: “We are delighted to receive the HBF Customer Service award for a twelfth consecutive year, and that so many of our homeowners say they would happily recommend us to their friends and family. We would like to thank all of our customers who completed the survey.

“We believe this is testimony to the quality and attention to detail that goes into the service we provide, and all of our developments. This is a fantastic achievement and thanks must also go to our committed teams across the regions who provide excellent service day in day out to deliver attractive, high-quality developments across the UK.”

The HBF star rating scheme awards builders stars for customer satisfaction. The number of stars awarded is based on the homeowner feedback in an independent National New Homes Survey of customer satisfaction, conducted by the National House-Building Council (NHBC). The survey is designed to provide home buyers with information about house builders to help guide their purchasing decisions, and to encourage excellent levels of service across the industry.

The criteria for 5 star ratings are: 91% or more of homeowners must be prepared to recommend their house builder to a friend.

The survey covered the year to the end of September 2016, is entirely independent of any house builder or house builder group and is independently validated by Reading University.

The survey is one of the largest of its type undertaken in the UK. This year over 90,000 surveys were sent out, an increase of 61% on three years ago reflecting the significant increase in the number of homes being built.

Stewart Baseley, executive chairman of the Home Builders Federation, said: “The Customer Satisfaction and Star Rating Scheme is an accepted, robust and independently assessed measure of customer service. Achieving the highest levels of satisfaction is a huge challenge that requires commitment from everyone in an organisation from top to bottom. To do so whilst increasing output, to help address our acute housing shortage, is especially commendable.”

For a full list of the customer recommendation scores from every participating homebuilder, click here.

Plans lodged for 137 new homes at Ness Castle in Inverness

A previous development phase at Ness Castle

A previous development phase at Ness Castle

Plans have been lodged for the next phase of a housing development in the south-western outskirts of Inverness.

Developer Barratt North Scotland is seeking permission to build 137 family and affordable homes at the Ness Castle site in the city’s Torbreck area.

The scheme will form part of the second phase of a new community at Ness Castle which could feature close to 1,000 homes when completed.

An application lodged with local authority this week covers about 13 acres of the 108-acre site earmarked for development.

Documents submitted with the plans propose a mixture of detached and semi-detached housing in the new neighbourhood.

Douglas McLeod, regional managing director for Barratt Developments in Scotland, said the new project demonstrated the success of the Ness Castle development.

“Our new planning application for Ness Castle represents an update to our original plan for the site,” he told the Press & Journal.

“This new build phase will provide 137 new homes suited to first-time buyers, families and affordable occupation, all built to Barratt Homes’ exacting five star quality standards.

“Our progression into this new area of the site also represents the continued success of Ness Castle as well as its popularity as a top residential location in the Highland capital.”

Highland Council has highlighted the need for a new primary school in the area to accommodate residents, and a site has been reserved for the facility, with the developers expected to contribute to the building costs.

Initial plans for a 984-home estate at Ness Castle were approved by councillors in 2009 but the scheme stalled until the first 276-home phase was launched in 2011/12.

In 2015, Barratt Homes revealed it planned to build 350 homes at the development site, and last summer work began on 51 affordable Albyn Housing Society homes, backed by a Scottish Government grant.

RICS Scotland calls for infrastructure projects to be given budget boost

VA Dundee topping out 6

The V&A Museum in Dundee

An increase in funding for Scotland’s budget announced by Chancellor Philip Hammond can help tackle Scotland’s infrastructure deficit and boost the country’s competitiveness in the global market, according to RICS Scotland.

Delivering his Spring Budget to the House of Commons yesterday, the Chancellor committed an extra £350 million of funding to the Scottish Budget as a result of Barnett consequentials – with the resource budget increasing by £260m in the period to 2020 and the capital budget increasing by £90m to 2021.

Gail Hunter, RICS director in Scotland, said: “The £350m funding boost as a result of Barnett consequentials is welcome, and gives the Scottish Government the means to bring forward vital infrastructure projects and make inroads into its target of 50,000 affordable homes by the end of this parliament.

“RICS has been a vocal supporter of expanding City Region Deals across Scotland, and we welcome the announcement that the Edinburgh city deal is progressing, as well as UK government support for a Stirling City Deal and a Tay Cities Deal, which will affect Perth and Dundee.

“The Scottish Government could direct the additional funding toward key infrastructure projects within these deals, which could return the highest economic and social impact. Furthermore, boosting Scotland’s rural and remote connectivity in terms of transport, broadband and energy can also stimulate the construction sector.

“Tackling Scotland’s infrastructure deficit will boost Scotland’s competitiveness in the global market and attract both foreign and inward investment at time when the UK’s looming Brexit and a potential second independence referendum are causing increased levels of uncertainty for investors.

“The announcement of additional support for the North Sea oil and gas industry will be welcome news to north-east Scotland; an economic area that has been devastated with the recent downturn in energy commodity prices and the forthcoming business rates revaluation.”

Douglas McLeod, regional managing director for Barratt Developments in Scotland, added: “We applaud the measures announced today to support the UK’s economy, particularly on skills. With 350,000 workers having left construction since the financial crisis, there is a real need to bring in more young people into the industry with new skills, so the announcements today are important.

“Equally important is the need to maintain high quality standards in the drive to build more homes. As a five star rated builder this is something we recognise and are focussed upon.”

Barratt profits buoyed by strong house sales in Scotland

David Thomas

David Thomas

A strong sales performance north of the Border has helped cement a healthy six months of trading for Barratt Developments.

The housebuilder has reported a rise in half-year profits after notching up a large number of completions outside London, citing particularly strong regional sales performances in the North, Scotland, North West and West Midlands.

The firm said pre-tax profits rose 8.8% to £321 million in the six months to December 31, despite revenue falling 3.2% to £1.8 billion.

Director David Thomas said: “We have delivered another very strong first-half performance, pre-tax profits were up nearly 9% and completions outside of London at their highest level in nine years.”

Total completions were down 5.8% to 7,180 with a slowing property market in London dragging on performance.

Completions in London came in at 367 versus 842 in the same period last year, although Barratt expects sales in the capital to pick up in the second half of the year.

Mr Thomas said: “With a record forward order book, strong consumer demand and a positive lending backdrop, we remain confident in our outlook for the full year.

“Our confidence in the business going forward is reflected in the improved and extended capital return plan.”

The group said the “fundamentals” of the housing market remain robust, with strong demand supported by good mortgage availability and the Help to Buy scheme.

The firm said: “There remains a long term housing shortage of all tenures that can be addressed through additional supply in the right locations. We are committed to playing a leading role in addressing this issue.”

Barratt currently has a land bank of 77,000 plots and is continuing to explore new ways of alleviating skills shortages.

It said: “On labour, we continue to see some pressure on skilled labour supply with shortages remaining location and trade specific. However, whilst labour costs are still rising, the rate of increase is moderating.

“We are also seeking to increase construction efficiency and reduce demand on labour through the use of alternative build options such as timber frames, large format block and light gauge steel frames.

“We are implementing a number of key initiatives in terms of improving efficiency.

“In addition to building around 1,300 homes during FY17 using timber frames we have completed trials of light gauge steel frames and large format block which give the business additional options with similar benefits as timber frame ensuring we are future proofing our business.

“We continue to trial various offsite technologies and innovative products and we are investing in research into smart technologies.”

Barratt Developments unveils plans for almost 2,500 new homes in Scotland

Douglas Mcleod

Douglas Mcleod

Barratt Developments has announced plans to build 2,480 new homes across 14 new sites throughout Scotland during the course of the year.

The housebuilder said the new sites will underpin over 6000 existing jobs and support over 200 extra jobs in Scotland, reflecting the continued demand for new homes in key locations. Barratt predominantly employs local sub-contractors and tradesmen – so local businesses and people will benefit directly from the jobs.

New developments to be launched in early 2017 include Weirs Wynd in Renfrewshire, Barratt @ Portobello in Edinburgh and Allan Park in Aberdeen.

The news follows a strong year for Barratt Developments in Scotland, incorporating both Barratt Homes and David Wilson Homes, during which it sold out on a number of successful developments including Verdant Walk in Edinburgh, Den of Pitfodels in Aberdeen and Kings Way in Renfrew.

During the course of the year (year ending 30th June 2016), the housebuilder opened 12 new sites across Scotland underpinning employment opportunities for 5,900 people. In total, the division built 1,556 homes, 49% of which were constructed on previously developed (brownfield) land. New sites launched last year include Westerwood Gardens in Dalkeith, Westburn Gardens in Aberdeen and Lauder Gardens in Strathaven.

Douglas McLeod, regional managing director for Barratt Developments in Scotland, said: “Demand for good quality homes in desirable locations is still high across Scotland, and our ambitions for the year ahead are a reflection of our confidence in the housing market. We’re seeing strong interest across the property spectrum, ranging from first time buyers interested in our starter homes, to older homeowners looking to down size.

“We’ll continue to build homes which meet these varied demands. At the same time, our plans will allow us to continue employing and supporting local construction jobs across the Scotland, providing a boost to both Scotland’s economy and to local communities in areas where we are active.”

Barratt parts company with finance chief ‘by mutual agreement’

Neil Cooper

Neil Cooper

Barratt Developments chief financial officer Neil Cooper suddenly left the company yesterday in a move said to be “by mutual agreement”.

Neil Cooper, who had joined Barratt in November 2015 from bookmaker William Hill, leaves the housebuilder a week after it reported a 5.8 per cent drop in home completions.

He was previously group finance director of Bovis Homes from 2007 until 2010.

Chief executive officer David Thomas, who previously held the role of Barratt CFO for six years, will reassume temporary responsibility for the finance function.

Barratt’s board is launching a search for a new CFO and a further announcement will be made in due course.

Neil Cooper said: “I wish David and the team all the best for the future and would like to thank the Board for the opportunity to work with Barratt over the past year.”

Chairman John Allan added: “On behalf of the board, I would like to thank Neil for his contribution during his time with us and we wish him well for the future.”

Barratt buoyed by booming regions despite fall in completions

David Thomas

David Thomas

Housebuilder Barratt Developments said that market conditions remained healthy and demand strong, despite a 5.8 per cent drop in home completions.

In a trading update for the six months to 31st December 2016, Barratt said home completions rose to a nine-year high, though overall figures were offset by a 56 per cent drop in completions in London during the period.

Completions in London, including joint ventures, fell to 367 in the first half, down from 842 in the same period a year earlier, “primarily driven by the planned build programme between the first and second half impacting wholly owned site product availability”.

Total home completions for the period, including joint ventures, totalled 7,180, down from 7,626 in the first half of 2015.

Total average selling price on completions rose 3.9 per cent to £264,000, and on private home sales the average price rose 5.3 per cent to £296,000.

Barratt said average price increases were down to the sales mix “as well as some underlying house price inflation”.

Chief executive David Thomas said: “Consumer demand is strong benefiting from good mortgage availability and ongoing government support.”

Profit before tax for the half-year is expected to be up around 7 per cent to approximately £315 million, (2015: £295.0m) while total forward sales (including joint ventures) are up 16 per cent at £2,336.6m and wholly-owned forward sales are up 35 per cent to £2,167.5m.

Mr Thomas added: “This has been another good half year for the group. Consumer demand is strong benefiting from good mortgage availability and ongoing government support. Our healthy forward order book and this strong demand leaves us on track to deliver on our volume guidance for the full year.”

Barratt Developments sold 17,319 homes in the year to June 2016, making it the biggest house-builder by volume in Britain.

Barratt Scotland delivers £319m boost to UK economy

Douglas McLeod

Douglas McLeod

Housebuilder Barratt Developments has delivered a £319 million boost to the UK economy over the past year, according to a new report from the firm.

During the 12 months ending 30th June 2016, the group, which includes both Barratt Homes and David Wilson Homes, has built over 1,550 new homes in Scotland and supported around 5,900 jobs. As part of its housebuilding activity, Barratt has made £12.7m in local contributions to help build new local facilities and infrastructure in communities surrounding its new developments.

The achievements are highlighted in Barratt Scotland’s latest Social Economic Footprint report which measures the housebuilder’s social and economic contribution to Scotland over the past year. Included within the report are key measures relating to the company’s support for the housebuilding supply chain, local communities, environment, public services and employment.

Highlights include:

  • Supported 5,900 jobs though Barratt, David Wilson, its contractors and suppliers
  • Directly employed 59 new graduates, trainees and apprentices
  • Supported 1,010 subcontractor companies and 930 supplier companies
  • Generated £12.7m in local contributions including affordable housing sales
  • Created 525 school places
  • Planted or retained 26,300 trees or shrubs on its developments
  • Recycled 97 per cent of construction waste
  • Created 70.8ha of greenspace through public open space and private gardens
  • Generated £39.4m in tax to support public services.
  • Contributed £318.9m of Gross Value Added (GVA) to UK economic output.

Douglas McLeod, regional director for Scotland at Barratt Developments, said: “The past year has been extremely busy for Barratt Developments in Scotland, and our socio-economic footprint reflects that level of activity. By building over 1,550 new homes, we have helped more people onto the property ladder, supported employment and skills development and boosted Scotland’s supply chain networks.

“However, it’s not just about building homes, it’s also about building communities and behaving as good corporate citizens. Through our local contributions, we have been able to provide more funds for local services such as education and leisure facilities.

“As responsible stewards of our environment, we have also demonstrated a commitment to sustainable housebuilding practices including site recycling, tree planting and waste reduction measures.”

The report on Barratt’s Socio-Economic Footprint in 2016 was carried out by planning consultant Nathaniel Lichfield & Partners.

Trading continues well for Barratt Developments with ‘ongoing strong demand’

David Thomas

David Thomas

Housebuilder Barratt Developments said demand for new homes remained “strong” as sales rose 4.3 per cent since July.

Issuing a trading update today, the company said the demand was driven by a shortage of homes, good mortgage availability and supportive government policy in the shape of the Help to Buy scheme.

However the firm added that it was wary of the political uncertainty that could potentially be triggered once Britain formally begins the process of leaving the European Union.

Chief executive David Thomas said: “This has been another good trading period for the Group. Consumer demand is strong supported by good mortgage availability. “We are mindful of the potential for economic uncertainty created by the outcome of the EU Referendum. However, market fundamentals are robust, and we remain a housebuilder of choice.

“Barratt’s commitment to quality design, build and excellence in market-leading customer service has supported our strong sales performance. Our focus remains on maintaining good operational and financial performance, and delivering attractive shareholder returns.”

The housebuilder has launched 69 new developments since July, compared to 51 in the same period last year. The company now has 385 sites, slightly up on last year’s 380.

Barratt said the average rate of reservations per week was in line with last year, at 265.