UK Housing Boom Drives Up Barratt Developments' Average Sale Price by 13%

UK house builder Barratt Developments said the average selling price of its homes has jumped 13% amid the housing market revival.

The firm said in a trading update ahead of its full-year results for 2013/14 that it sold the homes it built for £220,000 on average, up from £195,000 a year before.

Barratt said this was because it built more large homes, but also because of the sharp rise in house prices across the UK.

According to the Office for National Statistics (ONS), the average price of a UK house went up by 9.9% to £260,000 across the year to April 2014.

That is because of a serious shortage of supply and soaring demand as mortgages become easier to access.

Mortgages are cheap, thanks to the Bank of England's record-low 0.5% base rate, which has held down interest rates since 2009, and schemes, such as Help to Buy.

And the strengthening economic recovery in the UK, which will see 3% GDP growth in 2014, has also pushed up property demand.

"The market remains positive with strong demand for new homes across the country," said Mark Clare, group chief executive.

Completions were up 8.6% over the year to 14,838. But affordable completions were down a touch to to 2,255 from the 2,268 in the year before.

As a result of the improving market, Barratt said it expects its full-year profit to reach around £390m, more than doubling the previous year's £192m.