Housebuilder Barratt Redrow has said it sees “limited growth” for the year ahead amid a challenging property market and buyer worries over tax hikes in the upcoming Budget.
The group, which bought rival Redrow in a £2.5 billion deal last October, said the Budget on November 26 has added “additional risk” to the outlook.
It expects to complete between 17,200 and 17,800 homes in 2025-26, but forward orders are lower than a year earlier, at 10,350 as of August 24, compared with 10,398 a year ago.
It came as the firm – Britain’s biggest housebuilder – reported underlying pre-tax profits rising 26.8% to £488.3 million in the 53 weeks to June 29.
It said house completions came in lower than it had forecast, at 16,565 over the year, against previous aims for between 16,800 and 17,200.
David Thomas, chief executive of Barratt Redrow, said the “housing market remains challenging and we anticipate limited growth in 2025-26”.
He said the long-term outlook was “compelling”, but flagged homebuyer caution.
Mr Thomas said the firm’s forecast assumes a normal autumn selling season, but warned the “extended period through to the Budget… and related uncertainties around general taxation and that applicable to housing, has introduced additional risk”.
He called for stability from Government policy to help ease some of the concerns.
“It is vital that Government policy, in particular around taxation and regulation, is focused on creating a positive and stable environment for business and investment,” Mr Thomas said.
Firms in the sector hope for a boost in the coming years from Labour’s target of building 1.5 million homes by 2029, which has so far included reforming planning rules to make it easier to build homes.
But the Government also needs to boost homebuyer confidence and remove “constraints” on them, according to Barratt.
“Private homebuyer confidence remains fragile given the continuing affordability challenges they face, particularly around deposit requirements, and general concerns on employment, future taxation policy and mortgage rates,” Mr Thomas added.
The Bank of England is widely expected to keep interest rates on hold at 4% on Thursday and many experts now believe they may stay at this level until 2026.
