Britain’s biggest housebuilder has said that it will restart construction this month with a “social-distancing marshal” on each site to ensure that contractors are following government rules.
Barratt Developments downed tools on about 360 construction sites in March after the government lockdown was imposed.
Downing Street said that construction work could continue where builders were able to follow Public Health England guidelines on social distancing but Barratt decided to close all of its sites so that it could review health and safety. It has since developed a detailed set of working practices and protocols to support the safe operation of construction sites. Changes to sites will include new signage, access and layout, induction training and a nominated social-distancing marshal.
Its rival housebuilders Persimmon, Taylor Wimpey and Vistry Group announced plans to start reopening sites last week, in a move that was welcomed as a sign that the country would soon start to reboot the economy. Sales have fallen sharply since the lockdown was imposed, however, and are expected to remain low until at least the end of the current restrictions.
David O’Brien, analyst at Goodbody, said that Barratt sales over the past two weeks had fallen by 92 per cent year-on-year, which is in line with other housebuilders. “The numbers highlight how customers who were not as close to moving at the beginning of the lockdown are holding off,” he said. “It is important to keep in mind that, although construction sites are beginning to reopen, sales centres and show homes are not and therefore this sort of sales rate could continue until lockdown restrictions are loosened.”
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Barratt is the country’s biggest builder by volume. It sold 17,856 homes last year for an average price of £274,400. It said that it had experienced low levels of reservations since it closed its sales centres and expected a limited number of new completions before the financial year-end on June 30.
As at the start of this week the group had completed 11,776 homes in the financial year, compared with 11,723 at the same time last year. Its construction work will focus on the builder’s £2.9 billion order book, which accounts for 12,271 homes.
The reopening of sites will begin on May 11 in a phased return of construction activity. The company said that the first phase would not include any of its sites in Scotland, where the devolved administration has said that only “essential” construction work should continue during the lockdown.
Barratt has furloughed more than 5,500 employees on full pay to help to preserve cash. It also cancelled its interim dividend, cut the salaries of senior management by 20 per cent and postponed all non-essential capital expenditure. It said that a significant proportion of its workforce would be able to return to work in May as it reopens sites.
The company entered the crisis with a strong balance sheet It has about £430 million of cash and total committed facilities and private placement notes of £900 million. It has also received confirmation that it is eligible to access the government’s Covid corporate financing facilities if required.
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The shares edged up 5¾p, or 1.1 per cent, to 524¾p in morning trading.