Barratt Developments expects its number of home completions to drop to between 13,000 and 13,500 in the 2025 financial year, despite the pledge by the new Labour Government to develop 1.5 million new homes in the next five years.

In the year to 30 June, the housebuilding firm completed 14,004 homes, which although was in the upper end of its guidance range, was a year-on-year drop of 18.6%.

Furthermore, the first half of the financial year saw a decline of 28.5% in home completions, as a result of a lower order book and muted demand in the first quarter.

Barratt had also completed 7,239 homes in future sales in the 2024 financial year at a value of £1.91bn, which is in line with expectations.

Chief executive at Barratt, David Thomas, said: "During another year of economic and political uncertainty, we have delivered a strong operational performance, reflecting the exceptional work of our employees, sub-contractors and suppliers, and their commitment to delivering high quality homes that people want to live in.

"Whilst we continue to navigate a challenging macroeconomic backdrop, we are delivering industry leading build quality, sustainability and customer service. Combined with the strength of our balance sheet, this has ensured we remain resilient and responsive through the cycle."

Looking ahead, Barratt said that its combination with Redrow, which is subject to CMA approval, is set to bring together two businesses to "create an exceptional UK housebuilder" to ensure that it is "well-positioned for the future".

It added that despite the drop in housebuilding expectations, the firm welcomes the Government’s "urgency and focus on housebuilding and reform of the planning system as key to both unlocking economic growth and tackling the chronic undersupply of new homes".

Although Barratt said it expects to see in a reduction in average outlets in the 2025 financial year, this figure is expected to grow in the 2026 financial year.

Investment director at AJ Bell, Russ Mould, added: "Labour may have made a big play of getting Britain building but the industry is not yet responding in kind. Tellingly, Barratt Developments is expecting a further slowdown in completions in the current financial year.

"Its year-end trading update shows completions have already dropped dramatically from the levels seen in the 2022 and 2023 financial years and it means Barratt will only be building modestly more homes than it did at the height of COVID when restrictions put building work on hold.

"The long wait for interest rates to be cut is clearly affecting demand as the cheaper mortgages everyone was expecting this year haven’t materialised, at least not to the extent that was initially anticipated."

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