New Home Sales Numbers Released by Major Home Developer and Seller, Barratt Developments

As it is now 2011, most developers in the UK have already crunched their numbers trying to find a favourable outcome for their businesses which saw difficulties during the previous few years. Construction was halted for months and even years by some firms, as the financial crisis was being unwound. The fact that one large mortgage provider and builder, Barratt Developments, has reported positive numbers recently is good news for those who have current mortgages or for those who will be receiving mortgages soon.

The mortgage provider and builder mentioned in the recent articles from major media outlets in the UK is named Barratt Developments, and the numbers coming from this particular firm are promising. Not only did this firm produce positive results for its operations, it also helped many future homeowners secure low cost mortgages for the new homes they were building. As far as the numbers go, Barratt Developments sold exactly 4,832 units just in the second half of the year 2010 which is compared with the amount of 5,053 units which were sold by the firm in the first half of 2010. These numbers tell a big story for not only Barratt but for all other developers and mortgage providers.

While these numbers were positive, other subsequent numbers paint a less certain picture. The private reservations accounted per each active site per week decreased a bit to a factor of 0.39. This shows that customer sentiment is still fairly weak. In addition to this, cancellation rates increased a bit to the current rate of 20.1%.

Forward sales and mortgages were similar to those observed in the past year. For 2010, £645.7 million worth of forward sales were recorded by the firm. In addition, the number of active sites is reported to be sixty by the end of Q2 in 2011.

In response to these numbers, the group’s CEO Mark Clare commented that mortgage lending and associated mortgage availability has remained at very low levels. The low supply of mortgages has been attributed to the fact that there is still restricted availability of mortgage finance. This is going to be a main constraint on the mortgage market as well as the entire financial market at large.

From these numbers, Barratt Developments has made an announcement showing that it will join with Hitachi Capital (UK) to provide money to parents who are trying to help their children begin in the property market. The ease in getting mortgages for these people will cause the overall number of mortgages to increase in 2011, which will also drive down rates for consumers. This mortgage financing scheme is supposed to be unique for the property market since it has been designed for the current restrictions on the loan to value ratios of mortgages last year. In addition to this new mortgage scheme, Barratt will continue its building and lending services for its current as well as its new customers. 2011 will likely be a better year for mortgage availability than 2010 was.