British homebuilders have been cautiously optimistic as dropping mortgage rates and supportive housing policies from the new Labour government boost recovery hopes in the sector
British homebuilder Barratt Redrow said on Wednesday it was beginning to see more stable market conditions with increased mortgage affordability, indicating improved sentiment in the UK’s housing sector.
British homebuilders have been cautiously optimistic as dropping mortgage rates and supportive housing policies from the new Labour government boost recovery hopes in the sector.
It will take some time for customer confidence to fully recover from the macroeconomic headwinds faced over the last two years, CEO David Thomas said in a statement.
The company, which acquired smaller rival Redrow this year, said the integration is expected to deliver at least £90 million of cost efficiencies. Consultations are ongoing on five potential divisional closures announced earlier this week, it said.
Barratt Redrow said the private bookings rate for the combined group jumped nearly 37% during the August 22 to October 13 period, compared with the corresponding year-ago figures from the two businesses.
It expects to build between 16,600 and 17,200 homes in its fiscal year ending June 30, after incorporating Redrow’s order book and performance following the deal’s completion in August.
Sales rates are well ahead of the prior year, and there is a strong land bank ready to be unleashed when the housing market recovers, Hargreaves Lansdown analyst Aarin Chiekrie said in a note.
CEO Thomas told analysts on a call that the group was looking to the UK budget announcement at the end of the month to see whether the government would announce an extension of a stamp duty holiday beyond its expected end in March 2025.
Britain’s competition regulator cleared Barratt’s £2.52 billion all-stock acquisition of Redrow earlier this month.