Barratt Redrow trims housebuilding targets amid ‘challenging’ backdrop
Barratt Redrow has trimmed its housebuilding targets but insisted it is well positioned to face up to a “challenging” outlook as its new boss prepares to take the reins.
The FTSE 250 housebuilder said it is cutting back on spending and slashing costs to keep up with a “challenging backdrop”, as building costs surge and housing demand slumps as a result of the Iran war.
Investors were buoyed by Barratt Redrow’s efforts to guard against these risks, as the group’s share price jumped by more than six per cent to 294p in early trading.
The group’s chair, Caroline Silver, said: “A more positive start to 2026, with Budget uncertainties removed and interest rate cuts back on the agenda, was sharply reversed by the start of the Middle East conflict at the end of February.
“These events, and the corresponding risks around energy costs, disruption to supply chains and inflation, saw a significant shift in interest rate expectations, making homebuyers more cautious and increasing ongoing affordability challenges in the UK housing market.”
The firm said it now expects to complete between 17,500 and 17,900 homes next year, downgraded from between 17,700 and 18,200.
The group built 17,667 homes in the year to June, five per cent more than the year before, as revenue jumped by 6.6 per cent to £6bn. Pre-tax profit jumped by a third to £363.5m.
David Thomas, Barratt Redrow’s chief executive, said: “In a tough market, we have driven a strong operational and financial performance, delivering 17,667 homes, ahead of last year, and adjusted profit before tax in line with market expectations.”
Barratt calls for emergency measures
Later this month, Thomas will be replaced by Dean Banks, the former chief executive of Australian housebuilder Ventia,. “It has been an enormous privilege to lead Barratt Redrow over the past decade,” Thomas said.
The departing chief executive challenged the government to take immediate action to “accelerate housing delivery across the industry”.
Thomas praised Labour’s planning reforms but said they “took longer to be enacted than hoped” and must be backed up by measures to afford the affordability of homes for first-time buyers.
“By removing barriers to home ownership and addressing the increasing regulatory and tax burdens which constrain our industry, it will drive housing supply, to tackle the housing crisis, create jobs and support economic growth,” he said.
Earlier this summer, in a joint plea with homes portal Rightmove, Barratt urged Labour to abolish stamp duty for first-time buyers. London-listed housebuilding rivals Berkeley and Bellway have since backed up this demand.
In July, Barratt said it would launch a £400m share buyback scheme to allow its shareholders to take advantage of its depressed share price. The move followed months of pressure by Phoenix Asset Management, its second-biggest shareholder.
The group said that its “performance and resulting balance sheet strength” meant that the sweeping buyback would be “the most effective way to create long-term shareholder value”.