Barratt talks up housing prospects

BRITAIN's biggest housebuilder Barratt Developments said on Thursday that it had made over £1bn ($1.86bn) of forward sales for the current financial year despite higher interest rates moderating demand.

The group also shrugged off the latest Bank of England comments about falling prices as 'short-term uncertainties'.

The comment came from Barratt chief executive David Pretty ahead of today's annual meeting as he stuck to his September prediction of a 4% rise nationally in the price of new homes during 2005.

Presenting the latest Inflation Report yesterday, Bank Governor Mervyn King said the downward adjustment of house prices, relative to earnings, might continue for up to three years.

But Pretty welcomed the return to 'a more stable housing market', saying lower price rises next year would improve affordability. Barratt expects to sell some 14,700 homes in its financial year to the end of next June, up from around 14,000 last year.

Chairman Charles Toner said in a statement ahead of the group's annual meeting: 'Despite negative media reporting, and the uncertainty this causes potential buyers, we are currently achieving sales levels sufficient for us to secure another year of progress.'

'We believe there is no change in the underlying fundamentals of historically low interest rates, good employment levels and the severe constraint on supply caused by ongoing difficulties within the planning system,' he added.

Lower price rises in the year ahead would boost sales, the group said, and in the medium and longer term demand would exceed supply.