Redrow warns on mortgages

HOUSEBUILDER Redrow slashed its first-half losses following a pick-up in the number of sales and an increase in prices but warned that a lack of mortgages is still causing problems.

Completions climbed 21 per cent to 1,266 for the six months to December with the average selling price of homes rising 3.6 per cent to £145,500. This helped to lift sales for the period by 25 per cent to £187.2m while pre-tax losses dropped by 81 per cent to £8.7m.

Chairman Steve Morgan said the move back towards traditional family housing with the launch of its New Heritage Collection has struck a chord with customers. However, he lambasted the increasing levels of bureaucracy within the planning system which are slowing the process of getting planning permission. Morgan, who rejoined Redrow this year after almost a decade away, also echoed the views of his rivals in criticising the lack of mortgage availability which he says is behind the group’s 18 per cent cancellation rate.

He said that aside from planning, Redrow’s output was constrained by a chronic shortage of available and suitable mortgages alongside reduced property valuations by valuers acting for the mortgage lenders.