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Barratt Redrow has slowed land buying and cut its outlook for home sales in the year ahead as it warned the Government that planning reforms were “not enough”. Britain’s biggest housebuilder said the year had started on strong footing but that the Iran war had knocked consumer confidence. It nonetheless revealed that 17,667 house sales had been completed in the year to June 28, which was 5% more than the year before.
The company’s pre-tax profit jumped by 48% year on year to £363.5 million on the back of increased sales, coupled with initiatives to reduce business costs. This included significantly slowing the pace that it has been buying new plots of land, by making spending “targeted and highly selective”, according to the firm. Over the year, 3,029 plots were approved for purchase across 27 sites, compared with initial expectations of between 10,000 and 12,000 plots, which it said was set prior to the Iran war.
“Reflecting both rising build costs in the second half of the year and the uncertainty as to the ultimate impact on homebuying demand of the Middle East conflict, we became more selective in our land buying,” Barratt Redrow told investors. It nonetheless said it benefited from having an already strong land bank. Furthermore, the company lowered its outlook for home sales based on current conditions and activity in the financial year so far – with it now anticipating total completions between 17,500 and 17,900 in the 2027 financial year.
This is lower than the previously guided range of between 17,700 and 18,200 and reflected “continued planning delays”, according to the firm. Barratt Redrow said the positive start to 2026 was “sharply reversed” by the start of the US-Israel’s war with Iran at the end of February, which sent mortgage rates higher and halted the Bank of England’s cycle of interest rate cuts. This has been “making homebuyers more cautious and increasing ongoing affordability challenges in the UK housing market”, the housebuilder said.
Barratt Redrow called on the Government to do more to make housebuilding more affordable to support demand, particularly among first-time buyers. Barratt Redrow said spending on new plots of land was ‘targeted and highly selective’ (Steve Parsons/PA) (PA Wire) Chairwoman Caroline Silver said: “Whilst recent planning reforms should, in time, boost housing delivery, alone they will not be enough. “It is only by reducing barriers to home ownership and addressing the increasing regulatory and tax burdens that are constraining housebuilding viability across many parts of the country, that the Government will be able to unlock increased levels of housing delivery, including affordable housing, to start to tackle the housing crisis, create jobs and drive economic growth across the country.” On Tuesday, Kier Group said it will stop new investment into its property development business, in a fresh blow to the Government’s ambitions to build 300,000 new homes each year.
Furthermore, housebuilder Berkeley Group said “urgent reform” to stamp duty was needed to help first-time buyers and downsizing homeowners to support property demand. Shares in Barratt Redrow nonetheless jumped by more than 9% on Wednesday, after announcing that £400 million would be returned to shareholders in the 2027 financial year.
Source: The Independent
