viewBarratt Developments

Barratt Developments to pay £70mln to rectify faulty apartment blocks

The housebuilder also called on the government to extend the help-to-buy scheme beyond next March

Barratt Developments -

Barratt Developments PLC (LON:BDEV) said it will pay the £70mln bill to repair structural faults at the Citiscape building in Croydon and at other developments.

The FTSE 100-listed builder had already paid £15.8mln to remove cladding at Citiscape of the type that caused the Grenfell disaster, but said while doing that work it had uncovered structural faults within the concrete frames.

Residents at the site in Croydon were told to move out last year when cracks appeared and Barrett said a subsequent review of other developments had identified problems in seven that needed rectifying.

Barratt said though it had no legal liability, it had decided to pay for the work rather than it being bourne by leaseholders.

In a trading update ahead of full-year results to June, the housebuilder also called on the government to extend the help-to-buy scheme beyond next March to help the housing market stabilise.

Key to a market recovery is mortgage availability, said the builder, and demand from first-time buyers looking to use Help to Buy 'has been significant since the market reopened' after lockdown.

In the six weeks since reopening, Barratt said it had achieved a sales rate of 0.63 (2019: 0.69) net private reservations per active outlet per average week with no discernible change in pricing levels.

“Following the reopening of our sales centres, we have seen an increase in lead volumes, which are running at levels in excess of those achieved in the same period in FY19,” it said in the statement.

Barratt added that due to the coronavirus disruption it expects to complete (sell) 12,604 homes in the year to June compared to 17,856 a year ago.

Selling prices have remained resilient throughout the year, it added, with an average price of  £280,000 (2019: £274,400) with private sales little changed at £311,000 per unit on average.

Orders as at June 30, 2020, were worth £3.25bn (2019: £2.6bn) or the equivalent of 14,236 properties.

All furloughed staff are now back working for the company, it said, with the intent to pay back the government for the cost.

Cash at the year-end was £305mln with an undrawn revolving credit facility of £700mln.

Quick facts: Barratt Developments

Price: 664.4 GBX

Market: LSE
Market Cap: £6.77 billion

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