Barratt building strong order book

Barratt Developments, the house builder has seen reservations jump 25.9% in the period between July and the middle of November, compared to the same period of 2010.

The average price it is achieving on sales has increased by 7% on 2010 and now stands at £207,000.

Barratt has also booked 3,221 forward sales, up 27.4% on the prior year and gives its net debt figure of around £400m.

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The company is running 379 active sites compared to 349 in 2010 and expects this number to grow to 410 by the end of June 2012.

One of the drivers for profit in the house building sector has been the acquisition of land after 2008 when prices dropped significantly, allowing builders to generate better margins. Barratt is certainly keen to cash in and says it expects one third of completions from new land in this financial year increasing to more than 50% in in 2012/13.

Commenting on the results the group's Chief Executive, Mark Clare said: "The location of our new sites coupled with our highest quality housing is helping to drive pricing and some recovery in sales rates."

However, he also gave a warning over financing for buyers: "without an increase in the availability of mortgage finance, industry growth will remain constrained."

Shares in Barratt were up 5.13% on today's news. For the year to date the firm is up 6.5%.

BS