How to Buy Barratt Developments Shares UK

Barratt Developments Plc is the ‘big daddy’ of the so-called ‘big four’ UK housebuilders. Generating £5.267 billion in group revenue in 2022 and nearing 18,000 new-build completions, Barratt is one of the go-to equities for investors keen to get exposure to the UK property market.

Discover how to buy Barratt Developments shares in the UK to add to your investment portfolio using my detailed guide.

Also consider: My best stocks and shares to buy now

Barratt Developments (BDEV) share price

Below you can see Barratt Developments share price live, subject to stock exchange times and data update frequency.

6 Simple Steps to Buying Barratt Developments (BDEV) shares

There are six steps you need to follow if you want to buy or sell Barratt Developments shares. Each step is as important as the next, so make sure you take note of what to do at each stage of your journey with this company.

1. How to pick a suitable trading platform

Before you even consider whether Barratt Developments Plc is a suitable investment, you’ll need a trading site that makes it possible to buy and sell equities listed on the London Stock Exchange. I’ve spent a considerable amount of time testing and ranking trading software, and my guide to the best UK trading platforms covers all the questions you’ll want answered.

One of the biggest decisions to make with a trading platform is determining how you plan to trade or invest in shares like Barratt. Retail investor accounts are most suitable for those investing for the long term. At the other end of the spectrum, day traders that look to scalp short-term price volatility on equities within the FTSE 100 will probably prefer a contract for difference (CFD) broker.

With CFDs, you never physically own the equities you buy and sell on a stock exchange. Instead, you enter into a contract with your broker and speculate on the price rising (going long) or falling (going short). I’ve rated and reviewed the best CFD trading platforms open to UK-based traders too.

I recommend you don’t just pick the first platform you come across. Although most trading platforms have similarities, they also have nuances, so it’s important to know what you’re looking for in a trading broker. The five following components should be at the bedrock of your research:

Competitive account fees

In an ideal world, choose a trading broker that won’t charge you recurring fees for opening and managing your account.

Commission

Find a broker that pays the lowest commission for every trade executed on your behalf.

Available assets

Make sure the investment platform you select lists Barratt Developments as one of its available equities to buy, sell, or trade.

Educational trading tools

Choose a trading platform that gives you the tools to conduct your own fundamental and technical analysis of companies like Barratt.

Inactivity fees

Keep a keen eye on inactivity fees; some platforms will charge you a fee if you leave your account dormant for a set period of time.

2. Find an account that works for you

If you plan to own stocks in Barratt Developments, you’ll need one of the many available retail investor accounts to help you interact directly with the stock market. The best share-dealing accounts will make it easy to buy and sell Barratt Developments shares.

Share dealing services differ from long-term investing in that you’ll tend to hold stocks for shorter timeframes, with a view to yielding smaller but more frequent gains in a share dealing account.

If you plan to invest for the future and hold shares in Barratt Developments as a long-term asset for your pension or portfolio, a General Investment Account (GIA) could suffice. There are no limits to how much you can invest in a GIA, but remember that any profits realised are liable for capital gains tax.

To avoid paying tax on your investments in Barratt Developments, consider investing into a ‘tax wrapper’ account. Self-invested personal pensions (SIPPs) and stocks and shares ISAs are tax wrappers, as they aren’t liable for capital gains tax, income tax, or dividend tax. stocks and shares ISAs permit you to invest up to £20,000 in each tax year, while investors in SIPPs receive a 20% top-up from the UK government to boost their savings for the future.

3. Choose a broker that supports your preferred payment method

It’s essential that the trading broker you choose accepts the payment method(s) you want to use to deposit funds and withdraw profits further down the line. As it stands, the most popular payment methods are debit cards and wire bank transfers.

I’m finding it increasingly rare that brokers will accept the use of credit cards for deposits—and with good reason. The last thing anyone should be doing is trading the financial markets on credit. Financial investing and trading is a high-risk environment and should only be done with funds you can afford.

The most innovative trading brokers are starting to broaden their horizons and permit the use of mobile wallets such as Google Pay and Apple Pay.

4. Locate Barratt shares within your trading platform

Once you’ve created, validated, and funded your new trading account, you’re ready to find the Barratt Developments instrument page within the trading software. The quickest way to locate it is to enter the company’s ticker, also known as the Exchange Price Information Code (EPIC). In Barratt’s case, their EPIC is BDEV.

Simply enter BDEV into the search bar of your trading software, and it should display the relevant page showing the latest Barratt share price.

5. Keep your finger firmly on the pulse of Barratt Developments

Make sure you take full advantage of your broker’s trading education tools, which may be able to help with your research into Barratt Developments and your general execution of trades on Barratt Developments shares.

Take eToro, for example. It has an ‘eToro Academy’, targeting first-time investors. This covers essential topics and terminology to help you understand the markets. There’s also a ‘News and Analysis’ section, which includes updates on the biggest equities and asset classes.

Speaking of eToro, this investment platform is one of the pioneers of the copy trading concept, whereby newbies can follow the trades of profitable professionals. Although it has its merits, blindly following other traders in investment options like Barratt Developments is never a clever idea. It’s important that you open each trade knowing exactly how much upside and downside there is.

6. Submit your market order for Barratt Developments shares

Let’s say that you’ve created and funded your new trading account. You’ve found the Barratt Developments share price page on your trading site. You’ve researched the company, its short- and long-term growth prospects, and the wider property industry. Your research has spotted an opportunity to buy Barratt shares at a good price.

Use your trading software to set your market order. Most platforms will offer risk management techniques like stop-loss and take-profit orders that are vital to defining risk-reward ratios and protecting your trading bank.

How much does it cost to buy Barratt Developments shares?

The price of Barratt shares has risen significantly in the year to date. It’s up almost 21% in 2023. Like so many other equities listed in the FTSE 100, this has enabled the UK’s leading housebuilder to erase all the losses experienced during the bear market of H2 2022. [1]

Barratt Developments share price history

Understandably, the Barratt share price took a nosedive in 2022, when the UK’s cost-of-living crisis took flight due to rampant inflation. Due to rising interest rates and unaffordable housing costs, this led to increased talk of a potential housing market crash in the UK.

The fallout from the failed ‘mini-budget” saw Barratt shares plunge significantly in such a short space of time. From the day of the mini-budget (September 23, 2022), the Barratt share price fell from 406.00 (GBX) to 323.40 (GBX) in less than a week. That’s a decline of more than 20% in six days.

Fortunately for long-term investors in Barratt Homes, its share price has recovered strongly since the lows of last autumn. It broke the 400.00 (GBX) barrier before the turn of the new year and has rallied even further since, reaching highs of 514.00 (GBX) on May 30, 2023.

Has Barratt ridden the wave of interest rate hikes?

Despite the Bank of England’s continued hiking of the UK’s base rate, Barratt Developments has maintained its full-year 2023 revenue guidance. With full-year pre-tax profits expected to be “in line” with expectations of the markets at £877m.

The firm has described the current climate as a “challenging backdrop for first-time buyers”, with total forward sales down 29% year-on-year. Barratt is not immune from soaring build cost inflation, which is expected to peak at 10% in FY23 before falling to 5% in 2024.

Nevertheless, bullish investors in Barratt shares will be encouraged to hear that its net cash position will rise from £600 million to £900 million before the end of 2023. The company is also forging ahead with a share buyback scheme, totaling £200 million worth of shares.

The company’s share buyback scheme has been largely overseen by chairman John Allan, who held the position of chair since November 2014. Caroline Silver is due to become his long-term successor.

It’s also worth noting that its price-to-earnings ratio is currently just 9.8x, which is much lower than the trailing price-to-earnings ratio of the average FTSE 100-listed equity (13.88x).

Does Barratt Developments pay dividends?

One of the main reasons why Barratt Homes is revered by UK investors is its steady and substantial dividend yield.

Its annual dividend yield stands at 7.24%, which is an impressive return when you consider the average yield for the FTSE 100 index is 3.6%. Barratt is one of only a handful of equities listed within this index to yield more than twice that figure.

Its current annual dividend comes in at 10.2 pence per share. First-time investors in Barratt shares have missed the boat for the latest dividend, with the last ex-dividend date back in early April. Payments were made the following month, on May 18, 2023.

There is always a concern with investing solely for dividends that those annual yields prove unsustainable and damaging to a company’s long-term prospects. However, based on its most recent payments, Barratt’s revenues still comfortably cover its dividend to shareholders.

In the next 12 months, the firm’s earnings per share are set to grow by 2.3%. If its dividend yield remains on the same trajectory, its overall payout ratio could reach 67% by 2024.

However, it’s worth noting that Barratt Developments has been forced to reduce its dividend at least once in its history. With the UK property market still on something of a knife edge, it would still be a relatively bold move to invest in Barratt shares solely for their dividend yield.

What’s the best way to buy or invest in Barratt Developments shares?

There are several avenues you can take if you’re looking to buy Barratt Developments stock. Which one best suits your needs depends on how you wish to invest.

Fractional shares

For starters, if you’re someone with a limited pot of money to invest for the future, the price of Barratt shares may deter you at face value. However, the concept of fractional shares is becoming increasingly common with UK-regulated brokers, many of whom allow their clients to acquire a fraction of a share in companies like Barratt Homes.

If this is something that could work for you, I’d highly recommend checking out the likes of Interactive Brokers, Freetrade, and eToro. All of these trading apps offer fractional shares, which make it possible to gain exposure to big-name corporations with the smallest of investment pots.

Diversified index funds

Another option is to invest in Barratt shares through a diversified index fund. Barratt Developments is currently listed within the FTSE 100 index, which is one of the most popular indices listed on the London Stock Exchange. It contains 100 of the UK’s most valuable companies, weighted by market capitalisation.

Barratt Developments is also included in the FTSE 350 and the FTSE 350 Household Goods indices. The latter of which is a go-to index for anyone looking to get direct exposure to the biggest names in the UK housebuilding sector. This includes the likes of Taylor Wimpey, Persimmon, Bellway, and Crest Nicholson.

We’ve already touched on the fact that Barratt’s dividend yield significantly outperforms the FTSE 100 index, so it’s no surprise that this company is one of 50 equities within the iShares UK Dividend exchange-traded fund (ETF). This includes the top 50 stocks with high-paying dividends.

There are several other ETFs involving Barratt Developments. These include the First Trust United Kingdom AlphaDEX UCITS ETF, which tracks the benchmark index called the NASDAQ AlphaDEX United Kingdom index, and the UBS MSCI United Kingdom IMI Socially Responsible UCITS ETF, which tracks the performance of ‘low-carbon’ equities listed within the MSCI UK IMI Extended SRI Low Carbon Select 5% Issuer Capped Total Return Net Index.

Trade Barratt Developments derivatives

The other high-risk alternative to speculating on the stock price of Barratt Developments is to enter the derivatives market. This allows you to bet on the price rising or falling without having to own shares.

Contracts for difference (CFDs) and spread bets on shares like Barratt Homes mimic the underlying market price of the housebuilder’s stock. Unlike conventional investing, you can ‘short’ sell shares with CFDs, which allows you to profit on a company whose share price falls.

However, derivatives trading comes with bucketloads of risk and should not be attempted without doing significant research into risk management and CFD strategies first.

That’s because losses can quickly multiply when trading CFDs that allow you to leverage positions, i.e., deposit a small percentage of the true value of your position on an asset.

How to buy Barratt Developments shares FAQs