Despite seeing a strong performance over the past six months, Barratt warned skills shortages are pushing up the cost of building…
The house building sector could be at risk due to the ongoing skills shortage, which is increasing construction costs.
Barratt reported it has experienced a surge in pre-tax profits, rising 40 per cent as home completions also rose by over nine per cent.
According to the figures, some 7,626 homes have been completed so far this year. This represents a 9.5 per cent increase from the half year ending December 2014. However, the firm warned it expects costs to grow between three and four per cent as skill shortages continue to plague the sector.
Chief executive of Barratt Developments PLC David Thomas said: “Whilst we have seen an increase in the supply of skilled subcontractors over the past year, there remains an industry shortage in the UK, with increases in labour costs remaining the largest driver of overall build cost inflation.
“We are well placed with the necessary labour to meet our operational and quality requirements. We are also seeking to increase efficiency through the use of timber frame on around six per cent of our plots during FY16 and through the use of alternative off-site manufacturing options, including closed panel roof solutions.”
Barratt saw its revenue increase 19 per cent to £1,875.5m, with pre-tax profit up 40 per cent to £295.0m.
Thomas added: “In line with our strategy, we have stepped up the number of completions in the first half and we did this in a disciplined way, both financially and operationally, without compromising on the quality of the homes we’re building.
“We will continue to grow in a way that delivers for the needs of homebuyers and shareholders alike.”