Housebuilder Barratt, of Bardon, Leicestershire says East Midlands outperforming UK
The UK's largest housebuilder said sales in the East Midlands had outperformed the rest of the country, helping the firm to double profits.
Barratt, based in Bardon, near Coalville, put the success down to a return of confidence to the market, Government-backed mortgage schemes and the strength of its David Wilson Homes brand in the region.
The company said it sold 857 homes in the East Midlands in the second half of last year, up 8 per cent on the same period in 2011.
National sales were up 5.3 per cent to 4,241 homes.
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This helped the group to a pre-tax profit of £46.1 million in the six months to December 31, an increase of 113 per cent.
Chief executive Mark Clare said an order book of £1.1 billion highlighted the strength of demand and would ensure a rise in profits in the year to the end of June.
Like many of its competitors who were hit hard by the recession, Barratt's strong growth in profit is being driven by the higher margins it is able to secure from land bought during and since the height of the downturn.
The company has also switched its focus away from flats and social housing to higher yield more upmarket homes.
"Our half-year results are another big step in the right direction," said Mr Clare.
He said Government-backed mortgage finance schemes aimed at boosting the housing sector, such as NewBuy and Funding for Lending, were now starting to make a real impact. Both schemes can provide mortgages of up to 95 per cent to first-time buyers at a 5 per cent interest rate because the housebuilder and the Government underwrite a lot of the risk. Mr Clare said the fact borrowing costs had fallen was a positive sign.
"The reason rates have come down is because lenders are competing for business again," he said.
Revenue fell slightly from £952.8 million to £951.1 million during the half-year period.
Debt fell from £542.2 million to £331.7 million. The company is aiming to have no debt at all by June 30, 2015.