Barratt Redrow and MJ Gleeson join house builder call for help: What is going on?
Over the past few months, a number of house builders have called for help, after positive results were offset by the expectation that the state of the housing market would impact further growth.
The builders have chorused the same warning to the government and wider property sector that further buyer recovery and support is needed to create stable market conditions, and on Tuesday two more companies joined the fray.
Barratt Redrow woes
FTSE 100 firm Barratt Redrow completed 7,444 homes in the first half of the financial year, a 4.7 per cent year on year increase, while statutory profit jumped to £156.2m, amid a subdued market.
But profit before tax tumbled 13.6 per cent to £199.9m, which the firm put down to the costs of integrating Redrow into the business, including assessing the group’s properties values.
The group reported “strong progress” in settling Redrow into the business, with the integration “near completion”, expecting to deliver between 17,200 and 17,800 homes by the end of the financial year.
But while the group noted it is well positioned for further growth, following the playbook of its industry rivals, it called for help and support from both the government and wider industry.
David Thomas, chief executive of Barratt Redrow, said: “With a strong land bank, solid forward sales and synergy delivery in line with our targets, we are well positioned to deliver sustainable medium-term growth.
“However, 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.”
Following Thomas’ warning the group suffered a 6.9 per cent fall in its share price in early morning trading to 362.4 pence.
Julie Palmer, managing director at BTG, said: “It knows smaller developers without the infrastructure to soak up rising costs have been experiencing distress and won’t want to overstretch itself even as planning reforms begin to clear a backlog.
“Fixing the housing market takes time and every element needs attention to build a stronger house in the end.”
MJ Gleeson feels the pressure
Fellow house builder MJ Gleeson also reported a “robust performance in a subdued market environment” but warned the company is still operating under a grey cloud.
The FTSE 250 group reported a 9.6 per cent hike in revenue to £173.1m, driven by a 7.7 per cent rise in revenue in its Gleeson Homes arm to £168.6m.
Its Gleeson Land arm reported a 246 per cent increase in revenue to £4.5m.
Despite a 52.8 per cent drop in profit before tax to £1.7m, the company ended the half year with a forward order book of 978 plots, a 64 per cent increase.
But its joy of having incoming projects was short lived, after voicing its caution over its potential full year performance.
Chief executive Graham Prothero said: “Whilst current market expectations remain achievable, a strong Spring selling season remains fundamental to our assumptions in delivering on those expectations and we need to see the recovery gain further momentum.
“The bulk market has softened further, as investors remain cautious and focused on pricing.
“Margins continue to be pressured as net selling price increases are outpaced by build costs, and we experience increasing regulatory and tax headwinds.”
The group’s share price plunged 8.8 per cent in early morning trading to 359.9 pence.
Joining the chorus
The end of 2025 brought a wave of turbulent house builder results, with the majority reporting progress in completions, but this was clouded by the expectations that growth would ultimately be damaged in the coming months if the market was not provided assistance.
Persimmon, who saw completions rise 11 per cent to 11,905, ahead of market expectations, admitted that despite the reductions in mortgage rates it remained “mindful of affordability constraints”.
It also admitted to having fewer bulk sales in its order book and being conscious of regulatory costs, stating it “was likely to slow our growth”.
Taylor Wimpey warned that “demand continues to be muted”, particularly among first time buyers, “which will constrain the overall sector output” while uncertainty caused by the Autumn Budget impacting its order book.
Vistry, also suffered, reporting a decline in total house completions and flat revenue, noting that market conditions remain “uncertain”.
Why are house builders feeling the gloom?
While estate agents are beginning to feel the benefits of continuing affordability as house prices begin to rise once more, with Halifax reporting the average price breaching £300,000 in January, builders are feeling the strain.
Within the property sector,builders are feeling pessimistic for the future, as they continue to be crippled by a perfect storm of economic pressures, regulatory walls and market issues.
Despite builders welcoming planning reforms, it is shouting for demand-side support as widespread regulation persists.
Taxes and regulations including Residential Property Developer tax for cladding remediation and the Building Safety Act are adding thousands onto the costs of construction.
Meanwhile, the impending Building Safety Levy, which is set to come into effect in October 2026 and changes to landfill tax are expected to pile further high costs onto builders.
Efforts to streamline the system after builders voiced frustration over planning delays, in particular after blockades from local councils, many reported significant application delays.
Smaller builders were primarily affected, with a decline in approval on small sites threatening viability, while persistent shortages in skilled workers, such as bricklayers and joiners, also hiked labour costs.
Max Hayes, analyst at Cavendish, noted, when covering MJ Gleeson’s results, that it is the regulatory headwinds making investors cautious, despite the improving environment.
He said: “Whilst the demand-side environment is improving, supported by improving mortgage availability, loan products, and rate reductions, this may not be supportive enough to enable the necessary price rises to offset increased regulatory and tax headwinds, as well as persistent build cost inflation.”
Overall, analysts have warned the Spring selling season will be make or break for house builders if they want to deliver their full year expectations.