Housebuilder Barratt Developments posted a 56% slump in its annual profits as high interest rates and sticky inflation dampened demand for new homes.

The FTSE 100-listed company said it had delivered home completions at the upper end of its forecast but the market continues to be influenced by mortgage affordability.

its adjusted pre-tax profit came in 56.5% lower at £385 million for the year ended 30 June, compared analysts’ estimate of £365m and £884.3m posted last time. At the statutory level, pre-tax profit plunged 75.8% to £170.5m from £705.1m.

The total dividend is halved to 16.2p from 33.7% (down 51.9%).

The company said it has entered the current year with a solid forward sales position and as at 25 August 2024 we were 42% forward sold with respect to private wholly owned home completions for FY25 (27 August 2023 for FY24: 45%).

David Thomas, chief executive, said: “We are pleased to have delivered total home completions at the upper end of our expectations for the year, despite the challenging backdrop.

“Whilst demand continues to be sensitive to mortgage affordability, and reduced land buying activity during the past two years has had a near-term impact on the number of outlets we are operating from, we are well-positioned to meet the strong underlying demand for new homes of all tenures in the UK.

“We welcome the Government’s proposed reforms of the planning system as one of the key levers to increase housebuilding, drive economic growth and tackle the chronic undersupply of high-quality, sustainable homes.”

He said the company is working with the competition watchdog to finalise competition clearance so that it can begin the integration process