Housebuilder Barratt Redrow has posted falling half-year profits as it said the late autumn Budget created “significant uncertainty” on top of a lack of homebuyer confidence and spending power.
The group reported a 13.6% drop in underlying pre-tax profits to £199.9 million for the six months to December 28.
It completed 7,444 homes, up 4.7% on a year earlier, with an average selling price of £392,900 for private homes, up 5.21% on a year earlier.
Barratt said: “Whilst subdued, the trading backdrop was stable during the period with a less volatile mortgage lending environment supporting customer demand.
“However, consumer confidence remained low, economic and political uncertainty was high, and affordability challenges remained an issue for many customers, in particular first-time buyers.
“The scheduling of the budget on November 26, which was later than usual, created an extended period of significant uncertainty for homebuyers, but we benefited as customers decided to complete ahead of Christmas once Budget uncertainty was removed.”
The group – the UK’s biggest housebuilder following Barratt’s £2.5 billion deal to buy Redrow in 2024 – said it still expects to see home completions of between 17,200 and 17,800 for the full year, though it stressed its annual performance “remains dependent on sales activity through the spring selling season”.
Forward sales stood at 11,168 homes worth £3.41 billion as at February 1, up from 10,903 homes a year ago, but lower than the £3.35 billion value of orders a year earlier.
It added the group remains on track for full-year underlying pre-tax profits of £558 million to £617 million, up from £488.3 million.
David Thomas, chief executive of Barratt Redrow, said: “During the first half we delivered a resilient performance in a subdued market while making strong progress integrating Redrow.”
He said “While progress made on planning reform is encouraging, a stable and supportive demand environment is essential to enable increased delivery at scale across the sector.”
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