(Adds quotes, details)
LONDON May 10 Britain's biggest builder Barratt
said on Wednesday it expected 2016/17 pretax profit to
reach the top end of market expectations despite building barely
any more homes than in the previous financial year.
The firm said it anticipated profit would reach up to 733
million pounds ($950 million) in the 12 months to the end of
June, the highest figure in analysts' expectations according to
a Thomson Reuters poll. It would represent a 7 percent increase
But the builder said it would complete only around 30 more
homes to reach a total of 17,350 units, despite concerted
government efforts to boost housebuilding and deal with a
chronic shortage which has pushed up rents and house prices.
Shares in the company rose 3 percent by 0715 GMT.
Rising house prices, cheap mortgages and government schemes
designed to help younger people get on to the housing market
have helped Barratt and most of its peers book bumper profits
over the last few years.
Whilst the company foresees small volume increases over the
next few years, it said it would build fewer properties in
London next year after an around 20 percent decrease this year,
as rising city centre land prices have pushed it increasingly
into the suburbs.
"If you look at completion volumes, we will some further
reduction in London completions as we go into the year to June
2018," Chief Executive David Thomas told Reuters.
"We've been very successful in terms of securing sites in
zones three to six so we've got sites coming through," he said,
referring to the areas further out from the city centre.
Parts of central London have also become less attractive to
developers as sales prices fall and demand slumps due to an
increased stamp duty property tax on top-end properties and
Brexit deterring some foreign investors.
($1 = 0.7717 pounds)
(Reporting by Costas Pitas; editing by Kate Holton/Keith Weir)