𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

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, while it noted the use of “increased incentives” to help boost demand.

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.”

Shares in Barratt fell 6% as the group cut its interim dividend by nearly 10% to 5p.

Richard Hunter, head of markets at Interactive Investor, said the “budget hangover is plain to see” in Barratt’s results.

But he said there are some “positives which Barratts will hope are leading to a long-awaited inflection point”.

Aarin Chiekrie, equity analyst at Hargreaves Lansdown, added: “With the Budget hurdle now out of the way, the picture moving forward is a touch more favourable.

“The market’s currently forecasting two rate cuts by the end of 2026, which should help buoy buyers’ purchasing power slightly.

“The Redrow merger is also bringing a host of cost benefits as overlapping operations are streamlined, and the group’s enlarged scale is allowing it to negotiate harder on prices with suppliers.”

Smaller housebuilding rival MJ Gleeson was also seeing shares slide in morning trading on Wednesday, with the stock down nearly 10% after it reported interim profits more than halving as build costs soared.

It reported pre-tax profits of £1.7 million, down 53% on a year earlier, and said increases in selling prices was being offset by rising build costs.