The largest builder in the UK, Barratt Developments, is estimating the housing market will soon be normalizing prompted by a slight pullback now taking place.  This is taking place not long after other sectors of the housing market have just experienced similar trends.  Barratt has recently doubled its yearly profit and will be returning £400m to its shareholders.

The return will take place over a three year period and the first payment of £100m occurring in the late months of next year.

The cooling effect is a result of the government Help to Buy scheme slow-down which is starting now as the majority of house owners needing to take advantage of the scheme have done so and moved into their new residence, typically complements of Barratt.

The CEO of Barratt, Mark Clare, believes the company will see a modest increase in homes built in the twelve months leading to June of next year.  He thinks more than 15,500 will be erected compared with 14,800 which were built in 2014.

Other house builders have realised similar results.  However, the market is indicating with several factors that housing is starting to cool off, especially the London market.

The increase in base rate sometime next year will likely put a dampening effect on the demand within housing.  Increase in base rate means there will be a run up to the exact month when it takes effect, then a massive cool off period.  Those within the housing industry will be adjusting drastically as the time nears.

The base rate has held steady at 0.5% for years.