LONDON (Reuters) – Britain’s biggest housebuilder Barratt built just 76 more homes in its last financial year than the one before, it said on Wednesday, despite a government drive to end a chronic shortage in housing.
Britain needs to build up to double the roughly 200,000 new properties arriving on the market each year just to meet pent up demand, which has pushed up prices and rents, stopping many younger people from getting onto the property ladder.
Helped by the higher prices, Barratt posted a better than expected 12 percent rise in pretax profit for the year ended June 30 to 765 million pounds.
It built 17,395 homes during the period, up fractionally from the year before.
But it said completions in London, where the housing shortage is particularly acute, dropped around 20 percent, after it slowed the pace of land buying in response to rising prices.
Barratt has boosted output by more than 55 percent over the last six years to hit a nine-year high, but Chief Executive David Thomas said it also needed to focus on high standards.
“We’ve got to ensure that the houses we’re building are being built to the right quality and we’re providing the right customer service,” he told Reuters.
Rival Bovis is having to spend an additional 10.5 million pounds to deal with complaints after customers cited issues ranging from a lack of sealant in bathrooms to the heads of nails poking through walls.
Like most of its peers, Barratt has booked record profits in recent years, benefiting from a surge in demand which has pushed the average selling price of its homes up 6 percent over the last year to around 275,000 pounds.
The firm expects modest growth in volumes this financial year, but builders have consistently failed to plug a gap in volumes since the end of mass social housing programmes from the 1980s onwards.
Over the last twelve months, Barratt said it bought land worth 957 million pounds, down 13 percent on the previous period, after it stopped purchasing land in the immediate aftermath of the EU referendum, but resumed shortly afterwards.
“When you look at our sales trends, they have been very strong so we went back into the land market in September and we have very, very good momentum,” Thomas said.
Editing by Paul Sandle and Mark Potter