Barratt Redrow said Middle East conflict was affecting consumer confidence
Construction work on a new-build house(Image: PA Wire/PA Images)
Barratt Redrow has scaled back land purchases and trimmed its forecast for home sales in the year ahead, while warning the Government that planning reforms were “not enough”.
Britain’s largest housebuilder said the year had started well but that the Iran war had dented consumer confidence.
It nevertheless said that 17,667 home sales had been completed in the year to 28 June, a 5% increase on the previous year.
The firm’s pre-tax profit surged 48% year on year to £363.5 million, driven by higher sales volumes alongside measures to reduce operating costs.
This included a considerable reduction in the pace of new land acquisitions, by making expenditure “targeted and highly selective”, according to the company. Throughout the year, 3,029 plots were approved for purchase across 27 sites, compared with initial expectations of between 10,000 and 12,000 plots, which it noted were set prior to the Iran war.
Barratt Redrow, which is based in Coalville and has a key support office in Flintshire, told investors: “Reflecting both rising build costs in the second half of the year and the uncertainty as to the ultimate impact on homebuying demand of the Middle East conflict, we became more selective in our land buying.”
It nonetheless noted that it had benefited from an already robust land bank.
The company also revised down its home sales outlook based on current market conditions and activity in the financial year to date — now predicting total completions of between 17,500 and 17,900 in the 2027 financial year. This falls short of the previously forecast range of between 17,700 and 18,200 and was attributed to “continued planning delays”, according to the company.
Barratt Redrow said the promising start to 2026 was “sharply reversed” by the outbreak of the US-Israel’s war with Iran at the end of February, which pushed mortgage rates upward and brought the Bank of England’s cycle of interest rate cuts to a halt.
This has been “making homebuyers more cautious and increasing ongoing affordability challenges in the UK housing market”, the housebuilder said.
Barratt Redrow urged the Government to take further steps to make housebuilding more affordable in order to bolster demand, particularly amongst first-time buyers.
Chairwoman Caroline Silver said: “Whilst recent planning reforms should, in time, boost housing delivery, alone they will not be enough.
“It is only by reducing barriers to home ownership and addressing the increasing regulatory and tax burdens that are constraining housebuilding viability across many parts of the country, that the Government will be able to unlock increased levels of housing delivery, including affordable housing, to start to tackle the housing crisis, create jobs and drive economic growth across the country.”
In a further blow to the Government’s ambitions to construct 300,000 new homes annually, Kier Group announced on Tuesday that it would halt any new investment into its property development arm. Meanwhile, housebuilder Berkeley Group called for “urgent reform” of stamp duty to assist first-time buyers and those looking to downsize, in a bid to bolster property demand.
Shares in Barratt Redrow surged by more than 9% on Wednesday, following the announcement that £400 million would be returned to shareholders in the 2027 financial year.
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