Barratt Warns of Budget Risks Amid Profit Growth
Barratt Redrow has reported a sharp rise in revenue and profits but warned that uncertainty over the government’s upcoming budget could weigh on the housing market in the months ahead.
The UK’s largest housebuilder, formed through Barratt’s £2.5bn acquisition of Redrow last October, posted a 33.8% increase in revenue to £5.6bn for the year to 29 June. Adjusted pre-tax profits rose by 26.8% to £488.3m. Despite the robust financial performance, the company said the market outlook remained difficult. The Guardian reports that potential changes to property-related taxes, combined with high mortgage costs, may cause buyers to delay purchases until after the budget on 26 November.
Barratt Redrow completed 16,565 homes during the year, slightly below expectations. The group forecast between 17,200 and 17,800 completions for the current financial year, assuming a normal autumn selling season. Conversely, the wider economic backdrop continues to challenge the market. The Bank of England is expected to keep its base rate at 4% as it seeks to tackle inflation of 3.8%, almost double its target. Analysts believe higher borrowing costs and the possibility of further tax changes will continue to constrain demand.
UK’s largest housebuilder posts strong results but warns budget and tax risks could unsettle buyers.
The integration of Redrow has already delivered £69m in cost savings out of a targeted £100m. Six divisional offices have been closed, with three more scheduled to follow. The company described the acquisition as transformative, strengthening its ability to operate in a competitive market.
Government housing policy also remains a key factor. Ministers have set a target of building 1.5 million homes over five years, supported by a £39bn affordable housing programme announced earlier this year. However, The Guardian notes that political changes, including the recent resignation of housing secretary Angela Rayner, have created uncertainty over whether these plans will be delivered in full.
Barratt Redrow said progress would depend on reforms to the planning system, efforts to reduce barriers to investment, and support for first-time buyers.
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