Today one of the UK’s largest house builders announced that house “selling prices” fell by 19% in the last 12 months. Barrat also said that the number of new build properties it completed fell by more than 5,000 to 13,202, that is a fall in new build homes of more than 27%.
Looking across the UK analysts indicated that the West Midlands has been most affected by the recession. Barrat also indicated that the market for flats was poorer the houses and will switch some of its future building programme from flats to larger homes.
Barrat like many house builders has suffered hugely in the recession with overall debts ballooning following its purchase of a rival for £2.2 billion in 2007 (not good timing with hindsight). Going forward Barrat is reducing expenditure through less land purchases. This is slightly worrying, the combination of less land purchased and building of larger homes suggests a significant reduction in the number of homes built by Barret in the coming years. With the continued population growth forecasted, if other builders adopt a similar strategy, we could face a shortage of homes in years to come.
