Barratt Developments PLC (LSE:BDEV) will be the latest housebuilder to update the market as tough trading continues to hit the sector, with the company set to grace investors with full-year results next week.
Forward sales guidance, average selling prices and completions will all be points of focus in the 6 September results, according to Hargreaves Lansdown analyst Susannah Streeter.
Barratt has already announced total completions of 17,206 for the year to June 2023, a decline of 4% on 2022, but slightly above guidance.
Completions could be significantly lower in 2024 though, Barratt warned in July, coming in between 13,250 and 14,250, as higher living costs continue to eat into Brits’ pockets.
“Looking ahead, we recognise that there are significant macro-economic headwinds, most notably persistent inflation and a higher interest rate environment, which will impact UK economic growth, employment, and consumer confidence and spending,” the group said.
Streeter echoed the sentiment, acknowledging builders had “proven to be super-sensitive to interest rate speculation” – a stark fact given the Bank of England’s own hints of future hikes.
“Mortgage approvals have dropped month on month,” Streeter continued, “there will be concern this will lead to fewer completions.
“House prices are trending lower [too] and with potential buyers driving a harder bargain, margins could come under a greater squeeze.”
Some 8,995 orders worth £2.2 billion were on the cards as of 30 June, with adjusted pre-tax profit tipped to be in line with expectations of £880.6 million.