Key facts
- Barratt Redrow plans to approve between 7,000 and 9,000 plots of land for purchase in its current financial year.
- The company now expects to spend £700 million to £800 million on land, down from previous guidance.
- Barratt Redrow reported £5.6 billion in revenue for the year to June 29.
- The company completed 16,565 homes in the year to June 29.
- Adjusted profit before tax rose 26.8% to £488.3 million.
- Barratt Redrow anticipates completing 17,200 to 17,800 homes this year.
Barratt Redrow, the UK's largest housebuilder, is significantly reducing its land acquisition plans due to market uncertainty, geopolitical events, and rising building costs. The company now intends to approve between 7,000 and 9,000 plots of land for purchase in its current financial year, a reduction from its previous guidance of 10,000 to 12,000 plots. This revised target means Barratt Redrow will replace only about half of the land sold this year.
Consequently, Barratt Redrow expects to spend between £700 million and £800 million on land this year, a decrease from its earlier forecast of £800 million to £900 million. This cautious approach mirrors that of other major housebuilders, such as Berkeley Group, which has also stopped buying new land and implemented a hiring freeze.
These cutbacks by leading housebuilders are increasing pressure on Labour's pledge to build 1.5 million new homes over five years. In England, home completions and starts in the last reported year were significantly below the required annual rate to meet this target. High interest rates, construction costs, and complex planning rules have particularly affected London, where starts on social and affordable homes have fallen sharply.
Despite the challenging market, Barratt Redrow reported a solid performance for the year ending June 29, with revenue increasing by 33.8% to £5.6 billion and adjusted profit before tax rising by 26.8% to £488.3 million. The company completed 16,565 homes, slightly below expectations, and anticipates completing between 17,200 and 17,800 homes this year, assuming a normal autumn selling season.
Barratt Redrow's acquisition of Redrow last October was described as transformative, yielding cost savings ahead of targets. The company's chief executive, David Thomas, expressed that nearly 95% of the company's sales target for the current financial year has already been secured and does not expect the conflict in the Middle East to affect performance this year.