UK housebuilder Barratt Developments is planning to build fewer homes during the coming year, as high mortgage costs continue to impact demand.
In trading update on Wednesday, the company said that it expects to build between 13,000 and 13,500 homes in the 12 months to June 2025, including about 600 from joint ventures. That total represents a drop of up to 7% from the 14,004 homes completed in the year to June 2024.
It comes after the new Labour government set an ambitious target of 1.5 million new homes being built over the next parliament, equivalent to building 300,000 homes a year.
Rachel Reeves, the new chancellor, said that this would be achieved through measures such as relaxing planning restrictions and reintroducing mandatory housebuilding targets for local councils.
Barratt said: “We welcome the new government’s urgency and focus on housebuilding and reform of the planning system as key to both unlocking economic growth and tackling the chronic undersupply of new homes.
“We look forward to working with government and wider stakeholders to address supply side constraints and deliver the new homes, of all tenures, the country needs.”
Barratt anticipates that its adjusted profit before tax for the year ended 30 June 2024 will be “slightly ahead” of its previous expectations.
The country’s biggest housebuilder, Barratt recently agreed to acquire rival Redrow. The £2.5bn deal has been approved by shareholders but remains subject to competition authority clearance.
