Barratt message for Bank on rates

BARRATT Developments, Britain's biggest volume housebuilder, admitted today there are uncertainties in the UK housing market.

This should provide the strongest warning yet from housebuilders for the Bank of England to keep its interest rates on hold at 4.5% tomorrow.

Barratt's board, headed by chief executive David Pretty, said the housing market has been returning to normal conditions over recent months following recent rises in interest rates.

The housebuilder predicted that average prices for its new homes would rise only in line with earnings over the coming 12 months at between 4% and 5% nationally. The average price of a new Barratt home rose by 8% to £165,000 for the year to end-June.

The slowdown in Barratt house price increases chimes with similar messages last week from builders Persimmon and Wimpey, and this week Bovis.

Barratt remains confident, however, that the market is underpinned by limited housing stock, and predicted a further year of growth.

It completed around 14,000 of sales over the past 12 months and wiped out its debts with strong cashflow.

The forward order book is up 10% on a year ago to a new record high of around £880m.

Barratt's landbank stands at four years' supply at current volumes, and margins have improved in its UK and US businesses.