Britain’s biggest housing developer said customers are struggling with mortgage affordability as it revealed a fall in profits.

Barratt Developments revealed a 3.9pc decline in the number of completions to 17,206 in the year to the end of June, weeks after bosses slashed its targets for the coming year to between 13,250 and 14,250.

The company suffered a 16.2pc fall in its adjusted annual pre-tax profits to £884.3m, down from more than £1bn the previous year.

It suffered a fall in profitability, with return on capital employed down to 22.2pc from 30pc, with forward sales down to 49pc for next year, compared to 62pc last year.

It comes after 14 consecutive increases in interest rates by the Bank of England to 5.25pc, with at least two more rate rises priced in by money markets.

Chief executive David Thomas said: “Customers continue to face cost of living and mortgage affordability challenges, and new developments are increasingly constrained by an ineffective planning system. 

“Whilst we expect that the backdrop will continue to be difficult over the coming months, we are a resilient business with a strong balance sheet and an experienced management team.”

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