Barratt warns over finance shortage
08 September 2010A lack of availability of mortgage finance for potential buyers is threatening the property industry, housebuilder Barratt Developments has warned.
Despite conditions in the market improving over the past year, the group's chairman warned that a shortage of mortgage finance could "restrict the industry".
The UK's largest housebuilder by volume, also added that by historical standards there was an "extremely low" number of buyers and sellers. And the group said that it had been forced to build fewer properties, which would do "little to address the nation's fundamental housing shortage".
The warning came as the firm posted a pre-exceptionals loss of £33 million in the year ending June 30, up from a £144 million loss last year, and marginally up on analyst expectations for a £38 million loss.
Bob Lawson, chairman of Barratt, said that the company's future could be affected by economic uncertainty. He said: "Whilst there was some improvement during the year, the lack of availability of suitable higher loan to value products continued to restrict the new build sector where customer deposits have traditionally been lower.
"With demand continuing to be constrained, the industry responded by opening fewer sites and controlling stock better. Whilst the improved balance between supply and demand has stabilised prices, it has done little to address the nation's fundamental housing shortage which in the longer term will underpin the sector's growth."
Copyright Press Association 2010
