Market Overview

Views on the Housing Market

Without doubt the housing market borders on a national obsession. For most people the purchase of a home is the biggest investment they will ever make and as one of the country’s leading housebuilders - selling around 21,000 new homes each year right across the length and breadth of the country, from affordable iPad flats to seven figure priced detached houses - we at Barratt fully understand how critical each and every buying decision is to the individual taking hold of the key to their new home.

Yvette Cooper, the Housing Minister, recently wrote; “Homes are the building blocks of our communities. They affect our health, our wealth, and our opportunities for happiness.”

Rising house prices have certainly affected the perceived wealth of those already on the home ownership ladder but as the ratio of prices to earnings has grown there are serious concerns about the affordability of housing for a growing proportion of the population. This is just one of the issues we are focused upon at Barratt.

Over the last decade house prices have grown much faster than earnings and the economy in general and that has caused problems for sectors of the community. First-time buyers have perennially struggled to get on the housing ladder but now struggling onto a ‘bottom rung’ home involves paying something like seven times their average annual salaries against a figure closer to four times a decade ago. Halifax, the biggest mortgage lender, has calculated earlier this year that key workers, such as nurses and teachers, can no longer afford to buy an average house in 70% of British towns. Five years ago that figure was 35%.

At Barratt we fully recognise that as a nation we need to build more homes, we want to raise design standards, we want to create developments with lower densities, we need to embrace building zero carbon homes and, of course, we must address affordability.

Our track record demonstrates that we have been working to address these issues. At Barratt we are dedicated to driving building volume forward to meet increasing demand, we have been a long standing leader in urban regeneration, as for example through our pioneering developments in the regeneration of London’s Docklands, and as one of the country’s major builders of social housing, working closely with the housing associations, we are striving to provide affordable housing. Those issues remain priorities but today we also need to address the fresh challenges to build more, greener homes.

We are well positioned to meet these demands. Following the acquisition of Wilson Bowden the enlarged business now comprises Barratt Homes, David Wilson Homes, Ward Homes and Wilson Bowden Developments.

We have developments from Aberdeen to Plymouth and product to satisfy all segments of the market. This gives us a very strong base for future growth and, armed with Wilson Bowden’s strategic land purchasing expertise, we intend to increase investment in land, the raw material of the business, to increase the momentum of new building and meet today’s demands.