Britain's largest homebuilder Barratt Developments has today reported a plunge in reservations in recent weeks as a deepening cost-of-living crisis and soaring mortgage rates hit the housing market hard.
The company's shares fell 7% in early trade, dragging down those of its peers, as it warned of a "less certain" outlook.
It said net private reservations per average week fell to 188 from July 1 to October 9, from 281 during the same time in 2021.
Britain's housing market has showed signs of slowing in recent months as interest rates have risen, while soaring inflation and recession fears have hit consumer confidence.
More recently, mortgage rates have risen sharply after the UK government's plan for billions of pounds of unfunded tax cuts spooked financial markets.
"The outlook for the year is less certain with the availability and pricing of mortgages critical to the long-term health of the UK housing market," Barratt said in a statement.
Shares in other top builders including Persimmon, Taylor Wimpey and Berkeley also fell this morning.
"A deterioration in the affordability of mortgages, especially for first time buyers, is just about the biggest spanner that could be thrown at the builders," said Hargreaves Lansdown analyst Sophie Lund-Yates in a note.
Barratt said it was still on track to deliver adjusted profit before tax for this financial year in line with its current expectation and also forecast wholly-owned completions to be in line with the year earlier.
The FTSE-100 company last month announced a £200m share buyback after posting a record annual profit.
It said total forward sales stood at 13,314 homes worth £3.60 billion as of October 9, compared with 15,393 units valued at £3.94 billion a year earlier.
