They are allowed to do the first two under the DPA.
As for legal privilege, these are:
"communications between a lawyer, acting in his capacity as a lawyer, and a client, are privileged if they are both: confidential. for the purpose of seeking legal advice from a solicitor or providing it to a client."
That would also seem fair enough to me.
Be aware Barratt have deep pockets to defend legal cases and are quite happy to ask and get their legal expenses paid by buyers who take legal action if they are unsuccessful.
Bearing in mind Barratt's customer care policy and philosophy, I am surprised and disappointed it has got this far. What does this concern?