Good morning, everyone. I'd like to welcome you all to our full year results presentation. I know it's a slightly earlier start than normal, so apologies. I think, first of all, if somebody was asking me what made me really proud as Chief Executive of Barratt, I would just cite this photograph. I think when you go through our presentation today, I want you to look at the numbers and what a great financial performance we've had and what a great operational performance we've had. I'd certainly ask that you take a bit of time and look at the photographs. I think we've got some absolutely stunning developments throughout the group, and that really contributes towards what we're doing for the customer in terms of really great quality and service and great places to live.
I'm going to start with an overview in terms of our performance and also an update on our progress in relation to our operational targets. Then Steven, and then Jessica will talk you through our financial performance. I'll come back and review the industry fundamentals, have a look at sustainability, and have a look at current trading and also outlook. First of all, if we look at the key highlights, I'm really pleased to say that our team have delivered another very strong operational and financial performance. Sorry, I can't pass that over. Our team have delivered a very strong operational and financial performance. When you look at the market backdrop, the market backdrop is clearly very supportive. First of all, in terms of consumer demand. Secondly, in terms of mortgages.
Thirdly, in terms of land availability. You'll have seen that we've delivered the highest number of homes that we've delivered in 11 years. We remain absolutely committed to growing the business, but we're going to do that in a very disciplined way. We're going to ensure that we continue to deliver great quality and great service. You'll see that we're making good progress against our medium-term targets, and we are delivering margin improvements. At the same time as delivering more completions and margin improvements, we are emphasizing our industry leading position in terms of quality and service. We again received HBF Five Star Customer Satisfaction Award for the 10th year in a row. We also received more NHBC Pride in the Job awards than any other house builder for the 15th year in a row. You can see that our business remains very resilient.
Our balance sheet is in good shape. We have strong cash generation, and we continue to deliver attractive cash returns for our shareholders. We published our vision and our priorities over five years ago, and we have remained very focused on that vision. The vision is to lead the future of house building by putting the customer at the heart of everything we do. This vision defines our actions, our culture, and the way that we do business. The vision is underpinned by four strategic priorities: Customer First, Great Places, Leading Construction, and Investing in Our People. We passionately believe that we need to put the customer first. We need to do this to build a responsive and resilient business for the long term. We also have to build Great Places, communities where people are really proud to live.
We aim to lead construction. We are continually striving for excellence in this field. Using new methods, embracing modern methods of construction, we have to lead the way. Investing in our people is absolutely vital. The industry has an acute skills shortage. Therefore, deploying successful strategies for retention and recruitment will help us to meet this skills challenge. We also aim to be the leading national sustainable housebuilder to create long-term value for our stakeholders. Together with our vision, our priorities help us to deliver strong financial and operational performance and to build a resilient and sustainable business. These priorities are supported by our financial discipline and also a set of principles which I will share with you later. Look at our investment proposition. I believe that we continue to have very clear differentiators that define a strong investment case.
We run one of the shortest land banks in the industry, which improves our return on capital employed and also reduces longer-term risk. We have an ever-stronger balance sheet and cash generation. We have strong and highly experienced build and sales teams who are rightly very proud of the standards that they meet. Our quality and service performance is key to the strength of our business. It is absolutely our license to operate in the communities across the country. In the past year, it has been good to see our competitors raising their game, and the standards of customer service are clearly improving across the industry. I can say with certainty that our delivery at Barratt has been very consistent and excellent across the last 10 years in terms of quality and customer service. Steven is going to talk about this in a little more detail.
Finally, our broad geographic spread gives us a diversified business, which represents a balanced U.K. market exposure. These differentiators do make us well-placed to deliver for our shareholders. We are going to keep striving to improve. We are absolutely not complacent, and you'll see that we continue to push forward in areas such as quality and customer service. We believe that we can grow volumes, but we will continue to do that in a disciplined way, and certainly continue to deliver margin improvement and strong cash returns. We've made very good progress against our medium-term targets, which are to grow wholly owned volumes by 3%-5% per annum, to acquire land at a minimum 23% gross margin, and to achieve a minimum of 25% return on capital employed.
We are continuing to grow volumes, and we've delivered strong completion growth in the year at 17,856 homes, with wholly owned completions up by 2.6% on the same period last year, and in line with our guidance at the lower end of the range. The current operational structure of our business has capacity to allow us to grow up to 20,000 completions per annum. We continue to buy land at a minimum of a 23% gross margin. FY 2019 gross margin was 22.8%, up 210 basis points from last year. We delivered 120 basis point operating margin improvement for the year to 18.9%, and Jessica will give you some more color on that later in the presentation. And Additionally, we continue to focus on return on capital employed, and we delivered a strong return on capital employed at 29.7%. Thank you, and I will now hand over to Steven.
Thank you, David. Good morning, everyone. I'd now like to take you through the operational aspects of the business. Starting with sales, we've delivered a good performance for the year. As a group, we achieved a private sales rate of 0.7 reservations per outlet per week. This is a strong rate and one we are very comfortable with, at a level where we can match build to sales. The H2 sales rate was in line with prior year at 0.76. The London sales rate includes reservations from two bespoke design and build arrangements, namely New Mill Quarter Hackbridge and Nestlé Hayes, as outlined in February. For the year, we achieved 17,856 completions, including JVs, and this is the highest level for 11 years. Our wholly owned completions were up 2.6% to 17,111, in line with our medium-term target.
The reduction in JV completions is in line with our planned delivery profile. We now have nine JVs, with only two located in central London. Turning to our buyer type. As you can see on this slide, we've delivered a similar completion profile to last year. Help to Buy remains an important customer proposition, 36% of our total completions utilize the scheme. Affordable completions are at 21%. This level is in line with our historical norm and reflects the delivery profile of land acquisitions. We expect a similar percentage in the current year. Part exchange completions were 11%, it continues to be a valuable sales tool for certain purchasers. Turning to pricing. The group's private average selling price on completions was GBP 312,000, down 5.1% from the prior year. Regionally, the private ASP of GBP 297,000 is 1.7% lower than prior year.
The principal driver of this is a change in product and geographic mix. Essentially, as planned, we've reduced the number of larger four and five-bedroomed houses and increased the number of three-bedroomed houses. As a consequence, the average size of units has reduced by 2.7%. In addition, there's also been a high proportion of units delivered from Scotland and northern regions, where the ASP is lower. During the year, London private ASP was at GBP 629,000, compared to the prior year at GBP 810,000. The comparative was unusually high due to the volume of completions from Central London in FY 2018, including our prestigious Landmark Place development. Across the group, we achieved some underlying house price inflation. Now looking at land supply. The chart shows impact due to NPPF on increasing the amount of consented land in the market. This is currently running at circa 370,000 annual consents.
It also shows that greenfield land price growth remains modest and prices are still well below the pre-downturn levels. Land prices remain broadly flat. There continues to be a good flow of excellent opportunities across the country. We remain focused on securing standard product sites for the regional business, whilst in London, we are targeting zones 3 and outwards. In the year, we approved 18,448 plots. This is a good run rate and is in line with our medium-term target to approve between 18,000 to 22,000 plots per annum. Our approvals were across 90 sites. Here are just two examples of the high-quality locations in areas of strong demand that we've approved during the year. On the left, we have a development at Baltic Street in Edinburgh. It's a former builder's merchant site located in the city's buzzing port district.
It's a very sought-after location, and we're building over 200 apartments with an average selling price of just over GBP 200,000. On the right-hand side of the slide, we have a greenfield site in North Abingdon, Oxfordshire. Abingdon is nine miles from Oxford City Centre and is a good location for family housing with an easy commuting distance. It'll be a dual-branded site, and we plan to build over 400 two-story homes across the full market mix, ranging from one to five bed units with an average selling price of under GBP 400,000. Work is expected to commence towards the end of the calendar year. Improving operating margin continues to be a key priority for us. We look to achieve this in a number of ways, including delivery from the strategic land bank and the use of our new product ranges.
The benefits of these are now flowing through into our operating margin. Firstly, an update on strategic land. During the year, 26% of completions came from strategic land. This generally traded at an enhanced margin of circa 300 basis points compared to instantly acquired sites. We're making good progress towards our medium-term target of 30% of completions from strategically sourced land. We've had a strong year on pull-through, with 7,915 plots converted into our land bank from 28 locations, which will further support growth in volumes and margins. Despite the high pull-through, we've maintained a strong pipeline position for the future. In the year, we added 1,451 acres from 36 locations. At the end of the year, we have 12,000 acres under our control across 259 locations.
Approximately 1/3 o f the pipeline now has a local plan allocation, providing confidence it can be pulled through into the immediate pipeline in the near term. To give an illustration of what we're doing on strategic land, I'd like to highlight a couple of sites that we've acquired and transferred into the owned land bank in FY 2019. Firstly, we have a site in Wilmslow, Cheshire, where we secured control of 37 acres of green belt land in 2014. In 2017, we achieved a local plan allocation for housing and then acquired the site for 174 plots in late 2018. Another example is Helen Park in the Cathedral City of Lichfield, Staffordshire. Again, we successfully promoted the site to local plan allocation, this time over a 10-year period. From there, we secured detailed planning permission and purchased the site last year for 157 plots.
As you know, in 2016, we launched new product ranges for both of our brands to support margin growth. We're making good progress on the rollout, and the benefits are delivering margin improvements. During the year, we've increased momentum in the rollout with over 6,000 homes delivered from the new ranges, compared to just over 1,500 in FY 2018. Currently, 72% of our outlets are using the new product ranges, with the remaining sites either trading out of our previous range or non-standard schemes, including our London projects. The increased use of the new product will continue to support margin growth in FY 2020 and beyond. We continuously review our product designs and refine them to drive further efficiencies. In addition to improved cost and plotting efficiencies of the new house type ranges, we've also seen a reduction in build speed times by an average of three to four weeks.
For example, our change in roof configuration has removed one lift of scaffolding, which not only reduces costs, but saves us, on average, one week of build duration. The new Barratt product is also highly suitable for modern methods of construction. We're also stepping up our usage. Turning to build costs. We actively manage our supply chain to spot the delivery and quality of our product. As you know, we have a centralized procurement team responsible for build materials and have operated in this way for the past 25 years. They manage 95% of build materials from foundation level for our standard product. On materials, we have experienced modest inflationary pressure in line with our expectations, with timber, bricks, and plastic drainage products seeing higher than average increases.
We have fixed price agreements in place for all of these materials to December 2019, and 65% for FY 2020, with the remainder not falling due for review until later in the year. Labor cost inflation has generally eased, although there remains some pressure in certain areas. Build cost inflation across the group was 3% in FY 2019 and in line with our guidance. Looking forward, we expect a similar level of build cost inflation in FY 2020 at 3%-4%. We are committed to increasing the number of homes we build using MMC to increase efficiency and to help mitigate the challenges posed by the shortage of skilled workers in the industry. We continue to develop, trial, and implement alternative construction methods across the country. We have achieved our 2020 target of 20% of home completions using MMC a year ahead of schedule.
This included building and selling over 2,600 homes using timber frame, large format block, and light gauge steel frame. Our new target is to use MMC in the construction of 25% of homes by 2025. Last year, we built over 2,300 homes using timber frame construction. The majority of these were in Scotland, but we're also increasing its use across England and Wales. In June, we acquired 100% of Oregon Timber Frame Limited, a key supplier to the group. Oregon is one of U.K.'s largest timber frame manufacturers and is based in Selkirk in the Scottish Borders, with additional production facilities in Burton in the Midlands. It produces more than 2,000 units of timber frame per year. We've worked with them for many years, and have always been impressed by their high quality products and experienced management team.
The acquisition will secure our supply chain and further assist in increasing our utilization of MMC going forward. We see further potential to increase the production capacity and add further value to the product. Barratt is absolutely committed to leading the industry in quality and customer service. To lead the industry has required long-term investment in our processes, controls, and systems, our people, and our product. All these ensure we build the highest quality developments, starting with the land we buy and the site layout and design. We ensure all developments are designed using Building for Life principles to create well-designed homes and neighborhoods, and that important elements like car parking, safe streets, and access to amenities have been considered throughout the planning process. During construction, we have extensive internal processes to make sure build quality is at the required optimal level.
At each build stage, we conduct comprehensive quality control checks. Additionally, the NHBC independently check each plot at 6 key stages from foundation through to build completion. Any items requiring attention are reported by the NHBC's building inspector and are known as Reportable Items, or RIs. Barratt RIs are the lowest in the industry at 0.17 RIs per inspection, and around half that of benchmark average for the large builder group. We have consistent standard construction details across our ranges. We have robust controls and procedures in place, with over 1,000 elements reviewed and checked on every house by our experienced site measurement teams. After legal completion, our commitment to customer service continues. Our site teams will follow up with customers within 24 hours, and again after seven days.
A director from the division will then follow up with the customer after three weeks. Customer service and quality are non-negotiable to us. We see them as key differentiators, not just with customers, but also with local planning authorities and landowners. While this has required investment over many years, we take the view that getting things right first time saves us time and money over the long term. We can measure our performance in quality and customer service using some key third-party metrics that you've heard us talk about before. As you know, we're the only major house builder to have been awarded Five Stars for customer satisfaction for the last 10 years in a row.
Given the importance of site managers in the quality control processes that I've outlined, we are proud that our site managers have won more Pride in Job awards than any other builder for the last 15 years in a row. The 84 awards we received in June represent 19% of the total industry, which is an exceptional performance. We've won more Building for Life awards for great design than the rest of the industry put together. We are the highest scoring national house builder in the NextGeneration Sustainability Benchmark. In summary, a strong performance in the year. We've achieved good completion growth and strong sales rates. We continue to make strong progress in improving operating margins through continued delivery from strategic land, increased delivery from our new product ranges, and tightly managing our cost base.
At the same time, we continue to deliver industry leading quality customer service while maintaining focus on health and safety. Thank you. I'll now hand over to Jessica.
Thank you, Steven. Good morning, everyone. We have delivered a strong set of results for the year. Revenue was GBP 4.76 billion, down 2.3%, reflecting changes in our mix. Gross profit was up 7.5% to GBP 1.08 billion at a margin of 22.8%. After administrative expenses of GBP 183 million, we delivered an operating profit of GBP 901 million. We made further strong progress on operating margin, which improved by 120 basis points in the year to 18.9%. Our profit before tax was GBP 910 million, a record profit for the group.
We closed the year with net cash of GBP 766 million, slightly lower than the prior year, reflecting investments to support our disciplined volume growth and a reduction in land creditors. Our ROCE was strong at 29.7%, in line with the prior year. Wholly owned home completions were 17,111, up 2.6%. Total home completions, including Joint Ventures, were 17,856. Private average selling price reduced by 5% to GBP 312,000, reflecting mix changes and our trade through of Central London, partly offset by some underlying inflation. Overall, average selling price was 5% lower than last year at GBP 274,400, which compares to a closing land bank ASP of GBP 275,000.
The ASP of the owned land bank is a good guide for FY 2020. Our regional business delivered 12,929 private homes in the year at an average selling price of GBP 297,200, reflecting the change in product mix outlined by Steven, partly offset by underlying house price inflation. In London, we delivered 604 private homes in the year at an average selling price of GBP 628,500. Of these, 127 were in Central London with an average selling price of GBP 1.4 million, with significant delivery from both Blackfriars and Landmark Place. We remain focused on delivering margin improvement, and this slide shows our continued progress.
Our gross margin improved by 210 basis points on last year to 22.8%. We continue to acquire land at a minimum 23% gross margin facilitated by our new product range. The acquisition of land at higher margins and usage of our new product range is driving margin improvements. There has been minimal net impact on margin in the year from inflation. We've previously set out five key drivers of focus to deliver margin improvement, and we're making good progress against each of them. Since the start of FY 2018, we've purchased land at a minimum 23% gross margin hurdle rate. At year end, 74% of our own land bank was purchased at these rates, demonstrating the benefit our short land bank gives in terms of being able to transform it quickly. Steven outlined earlier the benefits we're seeing from both our new product range and strategic land.
We're seeing operational efficiency come through from our move to industry standard warranty terms with a significant reduction in plots under warranty, which is down 25% from its peak. We saved GBP 4 million on show home costs compared with last year as our lease portfolio continues to decline. At year end, we had 310 owned show homes, up 68% in the year. Let's break down the components of our 120 basis point improvement in operating margin. We've seen good progress on delivery from our new site starts and new product range, which contributed a margin improvement of 110 basis points. We had a 10 basis point benefit from the cessation of show home lease back, saw a 20 basis point reduction from Central London as we trade out from those sites. There was a positive benefit of 60 basis points from mix on ongoing sites, commercial, and other changes.
Admin expenses, coupled with a reduction in other income, decreased margin by 80 basis points. On guidance, we expect a further small reduction in other income in FY 2020, along with normal inflation on operating costs of around 3% to lead to an administrative cost of around GBP 195 million. We've delivered good progress in operating margin, with an 80 basis point improvement from trading, which resulted in a margin of 18.5% before non-recurring items. We had one-off benefits from both the delivery of a sale of a legacy commercial asset, which contributed 10 basis points, and the reversal of an inventory impairment provision contributing 40 basis points. This was partially offset by a 10 basis point cost for replacing cladding on legacy properties related to our commitment to put our customers first. As a result, we delivered an operating margin of 18.9%.
We've made good progress against the revised operating framework we put in place last September. Our balance sheet is strong. We have 4.7 years owned and controlled land and have appropriately reduced our land creditors to 31% of the owned land bank. We're operating with net cash and had average net cash of GBP 298 million for the financial year. In November, we extended our GBP 700 million revolving credit facility through to 2023 on the same terms. Turning to our balance sheet. Our gross land bank increased by GBP 108 million to GBP 3.07 billion. Land creditors were 31% of the owned land bank, a reduction of 230 basis points on the prior year, in line with our intention to move from 30%-35% of the owned land bank to 25%-30% over the medium term.
We expect land creditors at 30th of June 2020 to be in line with our target range of 25%-30%. Trade payables, other working capital, and other assets and liabilities were at similar levels to last year. Net assets at the 30th of June were GBP 4.87 billion. Our business is strongly cash generative. We had average net cash during the year of GBP 298 million and closed the year with net cash of GBP 766 million. We have a disciplined approach and remain focused on ensuring that we manage our total gearing in line with our operating framework. Our land creditor reduction is on track, further strengthening our balance sheet, and we're also delivering on margin improvement, generating significant operating cash inflows.
We continue to run our business with modest average net cash. Expect lower levels in FY 2020 due to land investment, land creditor reduction, and the government's change in tax payments accelerating when tax is paid. Since June 2015, total gearing as a percentage of net assets has reduced substantially from 28.8%-4. 9% at June 2019, strengthening and providing resilience to our balance sheet. Our most significant asset is our land holding of GBP 3.07 billion at the 30th of June. As David outlined earlier, we operate with a short land bank model. We closed the year with a 4.7-year land bank, providing us with an appropriate land holding to support our disciplined growth in the medium term. In total, we have 80,022 owned and controlled plots and a further 5,207 Joint Venture plots. Turning to work in progress.
WIP has increased by GBP 170 million from last year to GBP 1.63 billion. This reflects our expected volume growth in line with our medium-term targets and is appropriate to maintain our high quality and service standards whilst recognizing health and safety needs. We have a few sites with high infrastructure requirements. Our three largest infrastructure sites, which equates to around 43% of our increase related to infrastructure, all have a land plot cost as a percentage of ASP at least 500 basis points lower than their regional average. WIP also includes an increase related to our own show home holding of 310 units at a value of GBP 60 million. We continue to closely control WIP levels. We've made good progress in reducing our central London joint ventures with the disposal of Aldgate in FY 2019. Following this disposal, we have two remaining central London joint ventures.
At year end, these had 262 units left to complete, 85% of which are now sold. Fulham Riverside is fully sold under a design and build arrangement, and Nine Elms is selling well. We expect Nine Elms to deliver its completions in FY 2020 and Fulham in the 2021 calendar year. We have a further seven active Joint Ventures split between outer London and the regional business. At year end, these Joint Ventures had an appropriate land bank of 3,887 plots. We expect to deliver around 750 completions from Joint Ventures in FY 2020 and around GBP 30 million of profit. Moving on to our cash flow. Our GBP 901 million operating profit generated a significant inflow. We have both invested in our business to support our volume growth and returned cash to shareholders through substantial dividend payments in the year.
Looking at the detail, we made net cash interest and tax payments of GBP 167 million and had a GBP 40 million movement from other non-cash and working capital items. We invested GBP 199 million in WIP and part exchange, GBP 93 million in land, and GBP 36 million in land creditor reduction. There was a cash inflow of GBP 76 million from joint venture dividends and the sale of our interest in Aldgate. As a result, our operating cash inflow for the year was GBP 443 million.
We made GBP 452 million of dividend payment and invested GBP 16 million in other investing and financing, leading to a net cash outflow of GBP 26 million in the year. Our year-end net cash position was strong at GBP 766 million. As a point of guidance, we expect the total of cash spend on land for FY 2020 will be around GBP 1.1 billion.
Of that, around half will relate to the payment of Land credits held at June 2019. We expect net cash to be around GBP 450 million-GBP 500 million at June 2020, with a reduction from June 2019 due to the government's change in taxation payment dates, with an outflow of around GBP 80 million. Land credits are reduction to our operating framework level of 25%-30% and land investment. The board recognizes an ongoing dividend stream is an important part of total shareholder return. It continues to propose a target level of ordinary dividend cover of two and a half times. Where market conditions allow, ordinary dividends will be supplemented by special returns. It remains the board's preference to make special returns through special dividends. The total dividend proposed for the year is GBP 0.464 per share, including the interim dividend of GBP 0.096, which has already been paid.
During the five years to November 2020, total capital returns are expected to be around GBP 2.1 billion based on current analyst estimates. Now, turning to a few areas of specific guidance for the financial year. We expect wholly owned completion growth to be towards the lower end of our 3%-5% range, with site numbers at a similar level to FY 2019. We expect interest to be around GBP 35 million, with cash interest at around GBP 10 million. In summary, we've delivered a strong performance in the year across our key financial metrics. Margin improvement has come through strongly with 120 basis point improvement in operating margin to 18.9%. We've continued to reduce our total gearing over last year to 4.9% at June 2019, with net cash of GBP 766 million. We have a strong balance sheet, and we're delivering well against our operating framework.
The strength of our business and our cash generation supports our capital return plan. Thank you, and I'll now hand over to David.
Thanks, Jessica. Thank you, Jessica, and thank you, Steven. As I covered up front, and hopefully Jessica and Steven have underlined, I really do believe that we have a very strong investment proposition. You can clearly see that we are growing completion volumes, we are improving operating margin, and quality and service is unquestionably embedded throughout the group. We've also outlined that we are making specific progress against our medium-term targets. Now I'd just like to look at the market. I think when you look at the overall market backdrop, it is still a very attractive backdrop. The lending environment remains very positive, and I think that is particularly for the new build lending environment. The government's housing policy clearly remains very supportive.
The extension of the Help to Buy scheme through to 2023 provides some real clarity, and the modifications from the scheme that take place in 2021 with regard to second time buyers, I think was largely expected. The government has a clear target of building 300,000 homes per annum in England to address years of historic undersupply. Despite the increased supply of new housing by all the house builders, there still remains strong demand across the country. As Steven outlined, the land market is clearly very attractive. Moving on to the mortgage environment and the two charts which I've shown you previously. On the left-hand chart, you can still see that average mortgage rates for 85% loan to value mortgages and for Help to Buy mortgages remain very low compared to historic norms.
There is clearly a competitive mortgage environment, which is enabling our customers to take advantage of attractive rates. The chart on the right shows the proportion of average income spent on monthly mortgage interest payments and repayments, capital repayments. This Halifax data shows that affordability for mortgages remains good, with mortgage costs as a proportion of earnings well below the long run average due to low borrowing rates, some wage inflation, and tempering house price inflation. In addition, if we look specifically at the new build mortgage market, we have seen more competition and a broader spread of lenders supporting the industry. I outlined our priorities earlier, and I said I would come back to this in terms of principles. Our priorities are supported by these principles, which you can see on the bottom part of the house.
Keeping people safe, being a trusted partner, safeguarding the environment, building stronger community relationships, and ensuring the financial health of our business. As I said earlier, we published this just over five years ago, and we are absolutely wedded to these priorities and principles. They are fully embedded across our business. We continue to focus on measurable targets that we believe will deliver value for all of our stakeholders. I'm just going to have a look at three areas in terms of priorities and principles in a little more depth, starting with investing in our people. As I've said before, skills shortages is the key constraint for the industry, and one which if we don't address, it will clearly deteriorate as we grow volumes.
With increasing volumes and an aging workforce, certainly difficulties in terms of bringing in overseas labor, it is ever more important that quality and service do not suffer as a result. As a group, it is clearly in our interest to be on the front foot in terms of addressing the skills shortages. We also recognize that there isn't an overnight solution. Investing in our people is a key priority. We aim to attract, inspire, and retain our people. We are investing in the future and we continue to develop award-winning schemes for graduates, apprentices, former armed forces personnel, and also our own degree apprenticeships. We now have 7% of our workforce on these schemes. This year alone, we will welcome 270 people into our future talent schemes. It's not just about recruitment, it's also about retention for our existing employees.
Over the last few years, we've substantially enhanced our employee proposition. We've seen turnover reduce in each of the last three years, last year down to 16% and on track to meet our KPI of 15% by next year. Turning to a key principle, safeguarding the environment. In other words, building a sustainable business. We believe that building a sustainable business is important and clearly will deliver value for our stakeholders. We aim to be the leading national sustainable house builder, and we have a commitment to sustainability across our business. Over the past few years, there has been an increasing pace and scale of change in the focus on sustainability. In line with our goal of innovative, efficient construction, the group's carbon emissions have reduced by 22% since 2015.
In order to build and deliver sustainable places to live, we continue to build high quality, energy efficient homes using low carbon materials such as timber and through our increasing usage of other MMC techniques. The government have made announcements regarding no usage of gas boilers in new build homes from 2025. This will be a key challenge for the industry, and we are already focused on looking at how we deal with that change to the regulatory backdrop. We have biodiversity action plans in place on the majority of our new developments, and we fully recognize the requirements outlined in the environment bill to move towards a net positive environment for biodiversity for all developments in the future.
As Steven touched on, we benchmark our performance in sustainability externally, and last year we were awarded gold in the NextGeneration Sustainability Benchmark, scoring us as the highest in the house building sector. Finally, in looking at principles, turning to building strong community relationships. A key part of this is our charitable giving and volunteering program. We feel that we're really empowering our workforce to make a difference. To raise funds and volunteer for causes that are close to their hearts and close to their local business. They're supporting their local communities and focusing on vulnerable and excluded people in our communities and protecting and enhancing our environment. Since we began business in 1958, Barratt has built an industry leading reputation reflecting our focus on putting the customer first, building great places and also working in partnership with local people and local communities.
We are very committed to building on that positive legacy. In the first half of the year, we made our largest ever charitable donation to Royal British Legion Industries. In March 2019, to mark our 10th year as a five-star house builder, we announced a new GBP 500,000 three-year partnership with St Mungo's to help improve the lives of those experiencing homelessness. This sits along our existing and major partnership with the RSPB. Barratt and David Wilson Community Fund will see over GBP 1 million donated from our business to local charities and organizations over the next few years. We continue to look for more ways to support good causes and create a positive legacy. Let me now bring you up to date on current trading. It's been a good start to our new financial year.
Our private sales rate per outlet per week since the 1st of July was 0.7, compared to 0.75 last year. This is in line with the prior year at 0.7, once the benefit of two design and build arrangements are excluded from the prior year. Meanwhile, our forward sales position comprises 12,911 plots, slightly up from 12,648 plots last year, and is just under GBP 3 billion, a similar level to last year. We continue to make great progress in terms of achieving our medium-term targets. These continue to be a priority, and we will continue to drive the business with a particular focus on margin improvement, strong return on capital employed, and disciplined completion volume growth. We will continue to lead the industry on quality and service and focus on improving our own performance in that area.
Our current trading and strong forward order book mean we are very positive on outlook and looking forward to deliver further progress in FY 2020. The industry fundamentals are good. We will clearly continue to monitor the market closely. We are obviously very mindful of the economic and political uncertainty. We believe we are in a strong position and confident to move our business forward. Our vision, priorities, and principles are building a strong and resilient business for the future. Thank you. I'll now be happy to take questions. Start it from the end.
Yes. We'll start with Glynis.
Morning.
Morning.
Glynis Johnson, Jefferies. Three, if I may. First one on build inflation. You talked about 3%-4% for the full year FY 2020. Others have talked about seeing some moderation just in the more recent weeks. Can you just give us a little bit of color around that? The second one is in terms of your guidance for completions on steady site numbers. Is that just about the timings of the ins and outs through the year? Is that about confidence in terms of selling rates on those sites? Lastly, if I can drill down onto the margins, and I appreciate this has a few points, but you are obviously very substantially rolled out now in terms of the new housing types, and we've seen that in the full year FY 2019. Your strategic land is 26% of your completions; target is 30%.
When I look at the drivers of your margins, it appears that a lot of that you've actually put in place in 2019, so I'm wondering how much of that margin potential is yet to be captured? What can we look forward to compared to what you've actually seen already?
Glynis, hi. Good morning. If I may just start on margin, and Steven will pick up in terms of build cost, and Jessica can talk about completions and how we see completion volumes growing. Just in terms of margin, Steven put up the slide with regard to the house type range and how the house type range is sort of penetrating into the business, and Jessica covered the sort of five key drivers in terms of margin. The short answer is there is still plenty more to come from those initiatives. We still have land that we're buying at a higher margin that's feeding into the business. Jessica outlined, obviously, the percentage of land that's in land bank. I see we are partway through the journey, a journey that started in 2016, and there's still more to deliver.
We're already looking at what further things we can do. We said last time that we had updated the house type range again in 2018. We will clearly continue to review the house type range on an annual basis. Steven is always driving for where we can get margin improvement. I think we recognize that we've got to trade off in terms of the customer proposition because we don't want to substantially devalue the customer proposition. Therefore, there's certain areas where cost savings from our point of view are just not acceptable, and we wouldn't implement those cost savings. Steven, do you want to talk about build cost?
Yeah. Just by way of background on build cost. If you take last year, we guided 3%-4%, we came in at 3%. I guess what we've seen is, I mentioned a few components increasing in the last year, but over the last six months, we've seen timber price in particular start coming back, reducing. We're now getting timber prices fixed out 12, 15 months. We build a lot of timber into our product in terms of roofs, floors, doors, kitchen units even, so there's a high content of timber. Timber, we are seeing more stability in the market. We're guiding to the same level again for next year, 3%-4%, current year, should I say. We're also seeing some good benefits, components such as boilers, radiators, ceramic tiles. We aren't seeing any inflation. Well, very little inflation.
Likes of kitchen units, components like that, less than 1% increase. In terms of labor, that's part of the build cost inflation, don't forget. That's coming out around about 3% at the moment. Bricklayers was the stress point for us. Bricklayer and trades was typically going up about 4.5% a year. Again, in the last, perhaps last three months, we've seen that coming back a bit. Better availability of trades, perhaps. The 3%-4% guide for FY 2020 is where we feel we'll be.
In terms of volume growth, Glynis . As we've said, we're expecting volume growth to be at towards the lower end of our 3%-5% range. The growth this year is coming from three key areas. Firstly, it's the second full year of our Cambridgeshire business, so we'll be delivering more completions through our sites in Cambridgeshire. Secondly, in recent years, we've repositioned our London business to outer London. We've got a good selection of sites there, and we'll see more completions coming through on those London sites. Thirdly, we've got a couple of sites in the year, in terms of individual sites, where we'll deliver in excess of 200 completions in the year. We didn't have any individual site last year that delivered there. Growth's coming from those three areas.
Thanks. Will Jones at Redburn Partners, three if I could as well, please. The first just, I guess exploring trading in the last couple of months and just to double check, has it been a pretty consistent pattern over the weeks? I guess maybe drilling into July versus August separately. The second one was just, again, going further on the new house types. I think you said it was 6,000 or so completions last year. Do you have a number in mind for this year, and does that eventually settle at everything bar apartments, basically, in the medium term? Probably not, but would you be willing to give us a number within your group gross margin out of 22.8 or so, what that 6,000 units delivered as a gross relative to the group average?
The last one really was just, you mentioned land availability a few times today. Just wondered, big picture, is there anything you see either regionally or policy-wise or anything really that might in any way jeopardize that good stream of land availability over the next few years? Thanks.
Morning, Will. I counted that as four, actually. See, it's the accountant in me. If I talk about trading trends just in terms of current trading, which I touched on in the presentation, I'll also just pick up briefly on land availability. Steven can talk about what we're expecting for 2020 in terms of new house types. Jessica, I know will not give you an answer to the other question. Just in terms of trading, look, we are very comfortable with the trading position. We're really on it week to week. Steven is talking to the regional managing directors. I'm having regular discussions with regional managing directors, and we're not seeing anything unusual. We're looking at cancellations, we're looking at footfall. There's nothing unusual. I'd say the trading trends seem fairly robust.
0.7 is a good rate of sale for us through July and August. We're obviously conscious of the overall backdrop, but it just doesn't seem to feed into consumer sentiment. Whether that's for FY 2019 or whether it's for the last two months, I think that's consistent. I'm not going to split July and August because I don't think it's going to add anything. There's certainly been no big difference in terms of what we've seen during July and August. As you know, we tend to get busier as we move through September, October, November. We'll obviously update again on trading. In terms of land availability, I think the land opportunities are really fantastic. We are really securing land opportunities, and we have secured land opportunities over the last two or three years that certainly for the Barratt Group, I think have been pretty unprecedented opportunities.
When you're seeing in England perhaps 370,000 plots coming through planning annually, and we've seen that sort of number come through two years in a row. While some of it might be high-rise apartments in Manchester that we don't want to build, with a total population of 370,000 plots, there is plenty of land to go around. As Steven outlined, that's feeding into the greenfield land prices where you're seeing a relatively static position in terms of land prices. We've secured probably close to 60,000 plots over a three-year period, and that's a good run rate if we're trying to grow the business up to 20,000 completions per annum.
Yeah. On the house types, Will. We've been plotting the new house types on our all new sites since 2016, both Barratt and David Wilson brands.
Clearly, we've got some existing sites running out on the old range where we perhaps didn't want to trigger different Section 106 agreement requirements for increased contributions. The way we see it, probably if you take out the London business, 80% of what we build outside of London should be standard product. That would, in due course, would be entirely from our new ranges. In 2018, our new product accounted for 1,500 units. 2019, it was 6,000. We're expecting in 2020 for it to be circa 9,500- 10,000 units. I think there's a sort of a maximum potential getting towards about 12,000, 13,000 units from the new product going forward.
Jessica?
Yeah. Will, do you want some answer on your last question? I'm not going to give you a full answer as you're expecting. All I would say is that the new house type range is fundamental to us being able to acquire the land at the 23% gross margin hurdle rate that we put in place last year. If we look at land that we acquired prior to that, we were acquiring at the 20% gross margin hurdle rate before that date.
Chris.
Morning, Chris Millington from Numis Securities. First question I wanted to ask was just on incentives. There's a point in the cash flow slide showing PX as a slight outflow. Perhaps just a bit of detail on what's going on there and kind of where your limitations are. Next one's really just if you paid any consideration to this retention monies, which one of your competitors has clearly needed to do, but it doesn't feel you're in the same place. Again, just some thoughts there. It's probably one for Steve, and you showed 65% of your materials fixed out to June 2020. Just wondering, Steve, on kind of where the exposure is there, i.e., what's not fixed over that time period?
I agree with you allocating that one to Steven. Just on the first two, very briefly. In terms of PX, prior to Help to Buy, part exchange could be used on all transactions. When Help to Buy came in in 2013, you cannot combine part exchange with Help to Buy. We've seen a position where, if you look over the last seven or eight years, at most, we've done part exchange at about 20% of transactions, and at least we've been down at about 8%. I think this morning we outlined that we've stepped up from about 9% through to about 11% of transactions, that sort of level. There has been some increase in part exchange transactions over the last 24 months in practice.
I think there's limited scope for much more increase in the short term because of the fact you can't combine with Help to Buy. Part exchange, at least at headline level, is one of the more expensive incentives. It is a very, very strong incentive for the customer, and strong for the house builder in terms of competing with the secondhand market. In terms of retention, I think that that's a very special situation, and it's not something we've given any consideration to. I think what we've got to focus on as a business is we've got to focus on getting it right first time, and where we don't get it right first time, going back in and sorting the issues out for the customer. That's essentially the way we've run our business. As we touched on a number of times, we're five-star rated by our customers.
No, retention is not something we've given consideration to.
Yeah, Chris, in terms of the materials, just to emphasize there, 65% fixed in terms of there's nothing of major concern in the 35%. It's just that it isn't yet due for review. A lot of the material prices of the 35% is due from December onwards. We go through each component, and within our 3%-4% guidance, we've looked at each of the components where we've got price to agree, and we're pretty happy with what we've included in there. Things like plasterboard are to agree in second half. As I say, nothing what's causing us any real issues in that guidance.
I'm very conscious of the fact that. Okay, good. We're going to the right-hand side. [Amos].
[audio distortion] J ust two all relating to pricing, actually. Just wondering if you ignore the kind of structural drivers and improvements you expect to see in the margin, given your 3%- 4% on build cost, do you expect the HPI to kind of offset that? Neutral effect for FY 2020 on the margin from those two factors. If you could comment on regional trends you're seeing on pricing across the country, a bit more color there would be great. Thanks.
Okay. I'll just take both of those. Broadly, if we're seeing 4% build cost inflation, if we're seeing 1% or 2% house price inflation, then we're going to be there or thereabouts. I think for us, we have the added ingredient of two things. First of all, we have demonstrated that we can control the build cost inflation. We've published consistently over the last three or four years, build cost inflation estimates, and we've delivered in line with them. I think Steven, this morning, I know he's just given you a summary, but Steven has very good visibility in terms of material costs and evidence on a week-to-week, month-to-month basis in terms of labor costs. I think we're fairly confident in those build cost estimates.
I think the other ingredient that we can put in is our self-help measures. We have a number of initiatives running that are helping to improve margin. Whilst individually they may not be huge, there might be GBP 5 million on shore homes and so on, savings, as Jessica outlined, in relation to moving away from the five-year warranty, they all help in terms of improving margin. In terms of house price inflation, I think the simple position is that, we would tend to be a reasonable proxy for the national marketplace. We're operating in most places around the country. When you look at the Halifax stats and you see what sort of trends are being reported through Halifax, maybe price pressures in London, for example, price pressures in Aberdeen, very strong trading through Milton Keynes, very strong trading in Edinburgh.
I think we would be pretty consistent with those kind of statistics.
Clyde Lewis at Peel Hunt. Two if I may, please. You talked about 20,000 units being the capacity of the business. Is that professed on a certain market size or sort of market conditions at all, or is that very much a, these are the number of regional units we've got, and that's what we think we can put through each of those regional units? Does it include any expansion of your existing product range at all? Obviously, you highlighted high-rise in Manchester, obviously that's not in your product range at the moment, but just a little bit more discussion around that would be useful. The second one had was on local authorities and planning.
I was talking to a fairly big landowner recently that has indicated that whilst headline planning, certainly from a central government perspective, seems to be going very well, that the local authorities seem to be digging their heels in a little bit more than they have been over the last 6- 12 months. I'm wondering if that's something that you're experiencing or whether that was just the other company that had been experiencing that. If it is that starting to impact on how you're thinking about land buying and, you've indicated obviously a step up in spending plans this year.
Okay. Well, if I start on capacity, I mean, we'll just give you a sort of headline in terms of planning, and I'm sure Steven can add in terms of the planning backdrop. 20,000 is very much about our existing capacity. We looked at our new office in Peterborough, that is assuming that the new office in Peterborough is running at full output, around 750 completions from a standing start of zero a couple of years ago. It's also recognizing that we can grow our London business. Our London business at peak, had just over 2,000 completions, and we were back down at around 1,200, 1,300 completions. We have some growth within our London business. It's not looking at any new market opportunities, and it's not looking at adding any offices.
Clearly, Steven will be continually reviewing whether there is opportunity to open new offices. I think that's something we've done reasonably systematically over the last few years, it doesn't include any new office assumptions. Coming from a base of 18.5, moving to 20 is very much from our existing capacity. In terms of planning, I think you just have to put the overall context on, is that we have delivered through planning, as an industry, we've delivered 360,000, 370,000 completions. When you look at that against any 20-year run rate or any planning numbers back in the 2000s, that is a very, very large number of planning permissions.
I think the main area that the landscape has changed with the local authorities is that where the local authorities didn't have a five-year plan, they were losing everything on appeal because they just didn't have a plan, and they couldn't demonstrate that they could meet five-year demand. I think a lot more local authorities have got plans. We were coming from a position where less than 20% of the local authorities had a plan. Having a plan is giving them a better framework to resist, firstly. Secondly, the grounds that the local authority may contest the planning application on will vary. They'll perhaps have different grounds to contest planning applications. Steven, do you want to give a few more?
Yeah, on the planning, yeah.
Yeah.
Yeah, from my perspective, positive government sentiment, as you know, can vary by local authority due to political makeup. Ultimately, the appeal system is there. We do tend to get our planning approvals through by negotiation. I think we've only got three appeals running at the moment. Two of them are in Scotland, so one appeal in England. We do cooperate, work with the local authorities. It's about good design, great place making.
Providing excellent schemes and getting the local members on side. It takes too long, but we eventually get there.
Okay.
Well, thanks. Gregor Kuglitsch from UBS. Two questions. One, just coming back to the margin, just to be crystal clear, obviously you're talking about making progress. I presume that's against the kind of clean number of 18.5%, that's on slide 28, rather than the sort of close to 19%. If you could just give us some help of what the puts and takes are. Obviously, you outlined the land mix. Perhaps Central London is another tailwind and perhaps, kind of underlying house price versus cost is a negative. Is that kind of the direction you're thinking? Then perhaps if you could just give us some anchoring of expectation, so that we don't get too carried away given the jump you had last year. That would be helpful. Then the second question is on cash flow. I think that you called out a few items.
I think tax, correct me if I'm wrong, you said GBP 80 million. I think in the slide somewhere in the back it says GBP 100 million call on basic land creditor reduction. Correct me if I'm wrong. What else is there? I think show homes. I don't know where we are through that unwind. If there's anything else you'd like to mention. The reason why I ask is because your net cash guidance for the year end looks somewhat on the low side, considering the starting point and obviously the kind of broad profit projections. Thanks.
Okay. Thanks very much, Gregor. I'm going to pass them both over to Jessica, and Jessica will definitely temper everyone's expectations. Yeah.
Okay. In terms of margin, I'll start off by saying we're very focused on delivering the best margin possible. The start point for looking for margin go forward for FY 2020 is our underlying margin of 18.5%. Clearly we delivered ahead of that in FY 2019 at 18.9%, but the differential of the 40 basis points is very much one-off items that we can't repeat. There's a provision release on legacy sites that we've traded through and disposal of a commercial property. We only had one property of that ilk, so we can't repeat it. In terms of margin going forward, it's necessary to start at the 18.5%. As we've shown this morning, we've made good progress in terms of land acquisition and the proportion of our land bank that is there at the 23% gross hurdle rate.
The remainder of the land bank is at the previous hurdle rate at 20%, and that will take some time to trade through. Whilst we'll see progress coming through, we do still need to trade through from the old land bank. The third point that I would point to is the small increase in administrative costs in FY 2020, which is coming from the underlying increase in terms of normal inflation and a small step down in terms of sundry income. That's what I would point to when looking at margin growth for this year. In terms of the cash flow, we'd expect to outturn FY 2020 at GBP 450 million-GBP 500 million. Clearly we're only at the start of the year, so there is some degree of conservatism in that. There are three key things that are causing the cash to step down year- on- year.
Firstly, the additional acceleration of tax payments. We'll pay six quarters worth of tax payments this year, and that will give us an additional outflow of GBP 80 million. Secondly, an increase in terms of our investment in land. We expect to spend GBP 1.1 billion on land this year. The comparative for FY 2019 was GBP 940 million. You can see a step up in terms of land. Thirdly, we're expecting to reduce our level of land creditors very much in terms of in line with our operating framework of 25%-30%, and that's around GBP 100 million.
Just to say, Gregor, you can't use the GBP 80 million to try to reverse engineer what the profit number is.
No. I get that. Right.
Thanks. It's Charlie Cameron at Goldman. Just one question. Really goes back to the margin point. With the picture you've painted of the land market, some of the comments you've made are I think a break from the past, just some of the numbers you're showing in terms of land coming through. At what point do you move the hurdle up even further? In fact, kind of are you perhaps even doing that already given the land opportunities that are coming through? Yeah, just wondering at what point that hurdle rate can move up. Would you need the land market to be sustainably as good as this? Perhaps as the build cost improvements come through?
Yep, understand. I think we're looking at intake margin all the time. In overall terms, we obviously want to control the intake of land and therefore if we felt there was too much coming in, that would be an obvious trigger for us to be pushing hurdle rates up nationally. We've said that we want to manage the intake between 18,000 and 22,000 plots. I mean, understand it's quite a wide range, but we feel that we can run the business with that sort of intake, and we've published that over the last couple of years. I think the second part of it, which Steven is looking at on a regular basis, is there any need for us to adjust hurdles up or down depending on particular local circumstances? Obviously if there was a need, we would adjust it up or down.
Always with the recognition that our overall national intake needs to be at a 23% gross margin.
Thanks. John Fraser-Andrews, HSBC. Two for me, please. If I could come back to land and the guidance for higher spend. That would, it seems, take you even further higher than your operational framework. What's behind that? Is it special opportunities? Is it perhaps a move into bigger sites? Just the reasons behind that, please. The second one is on regional differences. In the sales rates, you've delivered very slightly down in the second half, flat in current trading. Are there any regional differences in those sales rates you've reported? Also in pricing. I don't think you answered the previous question. Have there been regional differences in prices, in the house price inflation you've reported in the period, and anything in current trading? Thank you.
Okay. Well, Jessica will pick up in terms of land spend. In terms of regional differences on sales rates and pricing, there's obviously overall differences in sales rates and pricing. London sales rates tend to be higher, and Scotland tends to be lower, and so on. In terms of current trading, then no, I don't think there's anything standout different in terms of what we're looking at for July and August on a year-on-year basis. In terms of pricing, I touched on pricing to the extent that I think the national indicators are a fairly good indication of our pricing. We've seen strong pricing in Milton Keynes and Edinburgh. We've seen relatively weak pricing in Central London and Aberdeen. Clearly it varies around the country. A lot of it will go back to the question about land and where land is being approved.
Where we have areas of the country where there's a lot of land approvals coming through, then that will clearly temper house price inflation going forward. Areas of the country where it is quite difficult to get land approved, for example, Edinburgh, for example, York would be another area where it's difficult to get land approvals, then that will tend to impact pricing.
In terms of looking at the land spend, I think the key piece that I would highlight is we're looking to secure the land to support our volume growth. Clearly we've got a medium-term target of 3%-5% growth per annum, and we need to secure the land this year to support that for future years. That's the key piece I would highlight. We very much intend to stay in line with our operating framework and taking account of the growth. There has been a slight increase in terms of site size on acquisitions in the last year. That's good because we can use both our brands and deliver with both our brands on those sites.
Good morning. Andy Murphy from Whitman Howard. Just one question, if I may. I'm just interested in the margin progression you're putting through in terms of the cost efficiencies. I was wondering what is ring-fenced. You did mention there are certain sort of parameters or red lines that you wouldn't step over in terms of pushing the margin up. Wonder if you could give us a flavor for that. Allied to that is, what is the sort of pushback or the parameters you think about when not stepping over those lines with regard to margin versus the quality debate?
Okay. I think it's really about looking at it from the customer's perspective and trying to understand, well, what does the customer think? If I could just give you two examples. One of the things that we said we had done in 2016 was that we reduced, particularly on the Barratt range, the roof pitch on the houses. Probably through design-led initiatives, our roof pitches had become steeper and steeper. We felt that we could take perhaps five degrees off the roof pitch. Now, I think the analysis there was the customer is not going to notice that. Clearly, the customer choice is not, do you want a Barratt house with a 50-degree roof pitch or a 45-degree roof pitch? There's just one roof pitch.
I would say over the last three years, as far as I'm aware, we've never had any comment from the customer that we've reduced the roof pitch. The valuer is not going to look at the house any differently from a valuation point of view. I think that's a good illustration of where we can reduce costs, improve profitability, and not in any way detract from the customer offer. I think the area that we've had a huge amount of debate about as a business, has been the subject of turf in gardens. Barratt has certainly for 10 or 15 years, if not longer, has provided turf in gardens, both front and rear. That is our standard proposition to the customer. Many of our competitors do not provide turf. I think our view in overall terms is that it goes to the heart of the customer proposition.
Whilst there is a cost saving that can be made, if a customer moves in and they've got to turf their garden, it's a very expensive proposition to go down to your local store and buy turf. It's something that you would need to do reasonably quickly if you've got children and a family pet and so on. That's an area where we've just said, "No, there's a red line there, and we're not going to cross that.
Thank you.
Just two questions from me. Firstly, on Help to Buy, as we approach the extension, and we look at the regional price caps, should we be expecting a further step down in terms of the mix of the houses and the sort of product ranges that are sold that you would potentially put in the market into those years? The second one is, in terms of timber frame utilization, as you step up your usage, should we be considering any further investment additional costs on the back of that?
Okay. Thank you. If I just cover those two points. In terms of Help to Buy, as you say, 2021, we have two changes to the scheme. The first change is that it will no longer be open to second-time buyers. Therefore, as a generalization, that might tend to be larger product for second-time buyers, people that are moving up to three-bedroom, four-bedroom, five-bedroom properties. The second area is the regional price caps. I think when you look at the regional price caps at face value, there seems to be anomalies in the regional price caps. I think that is simply the government's view of where they feel that there is a shortage of new build or there is not a shortage of new build.
Just as an example, they feel that there is a shortage, say, in Bristol, and therefore the price cap is relatively high, whereas they don't feel there is a shortage in Leeds, and the price cap is relatively low. We've got good visibility of that. One of the things that we will do, which Steven has touched on previously, is that we will just look at what replanning we need to do in terms of our developments, the extent to which we may need to replan product, or we may need to look at can we accelerate larger product in advance of the 2021 change. Those are very much the kind of changes that we're looking at.
In terms of timber frame, we also announced the acquisition, which for us, as Steven touched on, I think it's a very important acquisition for us to secure our supply chain for timber frame. It is a relatively small acquisition. We will certainly be spending money to improve the efficiency of the operation, and we're working with the local management, looking at what the options are. Obviously, if there's expenditure on that, we would just announce that in due course.
Good morning. Dean Grant, Bank of America. Just to come back to the Help to Buy quickly. You obviously gave a bit of detail about the different product ranges. I see 36% of your completions came through Help to Buy. What are the implications of the changes, obviously the regional caps? What are the implications of those from 2021 onwards? Your exposure to those, essentially.
Well, when you look at the national stats, and again, I think we would tend to be reasonably in line with the national stats. The first change is in terms of second-time buyers who will no longer be eligible within the scheme. Currently, that's around about 20% of people who are using the scheme are second-time buyers, and therefore they would drop out from 2021. We would expect, this is not a forecast obviously, but you would expect in advance of that 2021 expiry that there will be some acceleration of demand because people are going to be made aware. Certainly, the government will be making people aware that the scheme is going to expire. They will drop out initially.
In terms of first-time buyers, then I would think that what the government are trying to achieve is they're trying to achieve a position where the caps meet all the aspirations of the first-time buyers in the local areas. Therefore, they would not expect any reduction in utilization of the scheme. In fact, if you look at the Homes England forecasts for Help to Buy, they are expecting an increase in the utilization of the scheme. That's their kind of perspective on it. Okay, any other questions? No. Excellent. We're all done. Okay. Thank you very much, everyone. Thank you.