Despite the new government’s ambitions to boost housing supply Barratt’s end-of-year update shows home completions were 14,004 for the 12 months to June 30, down by almost 19% from 17,206 over the previous year.

Over the year ahead, it is forecasting a further drop in completions to between 13,000 and 13,500 homes.

Forward sales for the year just ended were also down compared to 2023, from 8,995 to 7,239 homes or from £2.2bn to £1.9bn.

Profits for the year are expected to be “slightly higher than expectations”, according to the update.

The housebuilder also faced £192m in costs relating to legacy properties and to its proposed merger with Redrow.

AJ Bell investment director Russ Mould says: “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.

“On a brighter note, there are clearly signs that the cost inflation experienced by the sector in recent years is beginning to ease. 

“Notably, the company is expecting to buy more land going forward which suggests that the current financial year could represent a nadir in terms of the volume of homes built.

“Barratt will hope its proposed merger with Redrow gets the all-clear from the competition authorities – a combination helping to build scale and, both parties will hope, resilience.”

Wealth Club’s Charlie Huggins says that although the year ahead looks set to see a further fall in completions, the industry may now be past its worst thanks to an improvement in mortgage rates, he says.

He adds: “Planning reforms laid out by the new Labour government could, if successfully implemented, lead to a significant increase in new homes built, providing a much-needed boost for the industry.”

Barratt Developments chief executive David Thomas says: “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.”