Barratt Redrow – building caution into expectations ahead of the UK Budget
Aarin Chiekrie, equity analyst, Hargreaves Lansdown: “Barratt Redrow’s full-year results didn’t bring any major surprises as the housebuilder saw aggregate completions fall by nearly 8% to 16,565 new homes. Hurdles, such as higher stamp duty, slow changes to planning approvals, and a softer market in London have all weighed on buyer demand. But these numbers were already built into market expectations after a short trading update back in July.
The outlook was a key focus, and an expected uplift in buyer activity should see Barratt deliver between 17,200 and 17,800 new homes in the period. This assumes a normal Autumn selling season, though. However, the unusually late timing of this year’s Budget, and the uncertainty it brings around taxation and buyer affordability, means these targets are anything but guaranteed.
Build cost inflation is expected to stay within a manageable 1–2%, supported by cost savings from streamlining overlapping operations as Barratt and Redrow move closer to completing their integration. On the balance sheet side, there’s plenty of cash on hand, and Barratt Redrow has a strong landbank to unleash when demand picks back up. It’ll likely be a year or so before major benefits start to feed through to profits. In the meantime,