Barratt Redrow Home Reservations Soften as Completions Fall 12% to 3,223

Britain’s biggest housebuilder has admitted that home reservations from private buyers are weakening, even as a larger order book and demand from landlords cushion the blow. In a trading update covering the 17 weeks to October 25, Barratt Redrow described a market still squeezed by affordability.

What the figures show

The company’s underlying private reservation rate slipped to 0.53 from 0.57 in the same period a year earlier. The total reservation rate, which includes all sales channels, moved the other way, edging up to 0.59 from 0.57. That gap suggests something other than the traditional private buyer is filling the space.

Completions, the point at which homes are handed over and revenue is booked, fell to 3,223 from 3,665 a year before. That is a drop of 442 homes, or roughly 12 per cent. The order book, by contrast, grew to £3.32bn from £3.28bn, a rise of about £40m, or just over 1 per cent.

Rental investors step in

Chief executive Dean Banks called trading “resilient against a backdrop of challenging market conditions”. He said that while the underlying private reservation rate had been softer, “we have seen stronger demand from the private rental sector.” In other words, the builder appears to be leaning on investors and rental operators to offset hesitation among households that would normally buy a home to live in.

The company, based in Coalville with a key support office in Flintshire, did not frame the figures as a crisis. But the split between weaker private demand and steadier overall reservations shows how much the picture depends on who is buying.

Budget measures and market reaction

The update follows an autumn Budget in which the Government announced a new First Time Buyer ISA and a “Your First Home” scheme, both aimed at helping people onto the property ladder. Mr Banks welcomed the support for first-time buyers and said that, alongside planning reform, the scheme “has the potential, over time, to support increased housing delivery.” The phrase “over time” is telling: the company is not promising a quick lift to sales.

Chris Beauchamp, chief market analyst at IG, said traders were concentrating on the improvement in the order book, “even if it is relatively slight”. He argued that this was enough to outweigh the weaker performance of recent months. That reading is generous. A £40m increase on a £3.3bn book is modest, and the fall in completions is considerably bigger in percentage terms.

What to watch

The update leaves several open questions. Do the new first-time buyer measures revive private home reservations, or does rental-sector demand remain the main support? Can the order book keep growing while completions lag? For now, Barratt Redrow’s message is that affordability remains the central obstacle, and that help from policy, if it comes, will take time to show up in the numbers.

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File photo: Barratt sales office, E3 June 2009.jpg by sludgegulper, CC BY-SA 2.0, via Wikimedia Commons.