Barratt Developments warns of house sale fall in London as figures drop by 50% from the previous year

• e-mail

Barratt Developments reported a 6 per cent drop in house sales following a sharp fall in business in London.

The FTSE 100 builder said it sold 7,180 new homes in 2016 - down from 7,626 the previous year.

Completions outside London were the highest for nine years, but Barratt sold 367 new homes in London between July and December, 50 per cent down on the previous year.

Property plummet: Barratt Developments reported a 6 per cent drop in house sales following a sharp fall in business in London

Barratt has cut the price of some of its most expensive London homes by 10 per cent to drum up business.

By contrast, estate agent Savills said the fall in the pound has boosted sales in the capital as foreign buyers look for bargains. 

It now expects 2016 profits to beat expectations.

The company made profits of £121million in 2015 and was expected to make £122million in 2016 but Chris Millington, an analyst at Numis Securities, said he now expects profits of £135million.

Barratt said it still expected profits for the six months to rise by 7 per cent to £315million. 

The group said it was in a strong position for the second half of the year after seeing total forward sales rise 15.8per cent to £2.3billion.

Nicholas Hyett, analyst at Hargreaves Lansdown, said: ‘The fact that Barratt has had to cut prices and complete bulk deals suggests that there are underlying problems in the housing market.

Barratt shares dipped 0.6 per cent, or 3p to 498p. 

Savills jumped 13.7 per cent, or 94.5p to 785p.