Barratt hit by a sharp fall in sales

Chief executive Mark Clare said buyers were showing a 'wait and see attitude', fearful about the prospects for the housing market and the knock-on effect from the credit squeeze and the Northern Rock debacle.

'If it is a decision they can put off, they will, but we’ve seen this before and when it recovers there will be a strong wave of demand,' Clare said. 'Sentiment is not getting any worse, but it’s too early to say it is getting any better.

He said the lower sales in the 19 weeks to November 12 were set against a very strong period in 2006, but in line with sales in the same period of 2005.

He said that his company’s sales volumes would most likely end 17% down for its second half, ending on New Year’s Eve, compared with last year. He expects prices to stagnate, with zero growth during 2008.

Sales reservations for new homes would continue to fall if, as expected, the debt markets continue to make it hard for lenders to offer the sort of cheap mortgage deals that house-hunters had become used to over the past few years, Mr Clare said.

Barratt’s sudden deterioration in trading over the 19 weeks to November 10 is the worst sales performance admitted to so far by any of the country’s big house builders since the run on Northern Rock.