Barratt Developments PLC (LSE:BDEV) should have been cheered by the new government’s 21st-century Keynsian commitment to build houses everywhere, but the short-term picture might be not so encouraging.
Sophie Lund-Yates, at Hargreaves Lansdown, notes “Barratt Developments had a lacklustre set of results at the half-year mark.
“The housebuilder did offer a glimmer of hope in the form of improving reservation rates, and we’d like to see momentum continue.
“Don’t expect a total reversal in fortunes just yet though, after underlying pre-tax profits fell almost 70% in the first half of the year.
That reflects a lower number of houses being sold, coupled with lingering cost inflation.”
Barratt’s all-share offer for Redrow will also be a test of the mood of the new administration towards consolidation as before the election the deal looked to be heading for a full-blown competition review.