UPDATE 2-UK builder Barratt scraps special dividend, sales pick up

* Barratt sees higher 2021 home completions

* Scraps 2021 special dividend; FY profit slumps

* Stock among top gainers on FTSE-100
(Adds details on market conditions, shares)

By Samantha Machado

Sept 2 (Reuters) - Britain's biggest housebuilder, Barratt
Developments, pointed to better advance sales and more
home completions over the coming year although it opted to scrap
plans for a special dividend payout after annual profit slumped.

Shares in the FTSE-100 company, which competes with Taylor
Wimpey and Persimmon, were up 6.6% by 0840 GMT as
the builder of homes in England, Scotland and Wales began its
new financial year with "cautious optimism".

The sector also got a lift after mortgage lender Nationwide
said house prices had leapt to hit an all-time high last month.

Britain's housing market has picked up pace after coming to
a virtual standstill from late March, with tax breaks for home
purchases and a trend towards suburban living caused by the
pandemic spurring home sales.

"Although uncertainties remain, all of our sites are
operational, we are seeing very strong consumer demand and our
robust financial position means we enter the new financial year
with cautious optimism," said Chief Executive David Thomas.

Barratt's total forward sales as on Aug. 23 stood at 15,660
homes with a value of 3.71 billion pounds ($4.95 billion),
compared with 13,064 homes last year.

The company said buyers were looking for homes with more
space indoors and outdoors as a result of the pandemic which has
seen many people forced to work from home.

Barratt praised the government's stamp duty holiday scheme
as a boost to the industry, but said that it saw signs that many
buyers were struggling with tighter lending conditions as banks
worry about loan risks.

"It is important that lenders and the Government consider
what further options are available to help potential first time
buyers who want to purchase their own home," Barratt said.

Its pretax profit fell 45.9% to 491.8 million pounds in the
year ended June 30. It incurred costs of 74.3 million pounds
related to the COVID-19 pandemic.

Barratt's move to scrap the special dividend due to be paid
in November of next year was in contrast with rival Persimmon,
which reinstated a payout last month after an "excellent start"
to the second half of the year.

($1 = 0.7498 pounds)
(Reporting by Samantha Machado and Yadarisa Shabong in
Bengaluru; Editing by Saumyadeb Chakrabarty and Keith Weir)