Barratt Developments share price in focus following interest rate rise

LAURA MCGUIRE

THE MARKET will turn its focus to Barratt Developments’ trading update on Thursday to see how soaring mortgage rates and a tumultuous period for the property sector is impacting housebuilding companies.

The housebuilder’s shares have fallen by around a tenth over the past year and more than half from their pre-Covid levels as investors have shied away from pumping money into the firm.

Last month, the Bank of England’s rate hike sent high street lenders to increase the costs of their mortgage deals.

“Lower volumes, flatter pricing and higher costs mean analysts are looking for a drop in adjusted pretax profit to £865m from £1,055m a year ago,” investment director at AJ Bell, Russ Mould, said.

Damning reports about the current state of the UK’s housing market have hindered shares in fellow FSTE 100 and 250 companies.

Reeves and shadow levelling up secretary Lisa Nandy will attend the summit with brokers on Wednesday to hear the impact of interest rate rises on first-time buyers and homeowners. She is expected to vow that Sir Keir Starmer’s party’s plans to put rocket boosters under housebuilding will bring security to families and the national economy.

And she will add that Labour “is now the only choice for people who dream of owning their own home”, with a four-point plan to help people get and stay on the housing ladder. The party want to see 70 per cent of people own their homes and say they will achieve this via a plethora of new initiatives including planning reform and a state-backed mortgage insurance and guarantor scheme.