UK Property Giant Barratt Redrow Lifts Profit Outlook Amid Housing Market Stabilisation

Britain’s largest housebuilder, Barratt Redrow, has issued an optimistic trading update, signalling stronger-than-anticipated profits for the current financial year amidst improving market conditions.

The FTSE 100 developer reported robust customer demand in recent months, particularly since the beginning of 2025. The company now expects its annual adjusted pre-tax profits to reach the upper end of market forecasts, potentially approaching £588 million, significantly higher than the previous consensus of £542 million.

Chief Executive David Thomas highlighted the marked improvement in market conditions compared to the previous year, noting stable house prices and declining interest rates as key contributing factors. The positive outlook triggered a 5.3 per cent surge in Barratt Redrow shares, closing at 460p, though still beneath last summer’s peak.

The merger between Barratt Developments and Redrow, completed last year in a £2.5 billion deal, has exceeded initial cost-saving projections. The company now anticipates achieving synergies of at least £100 million, surpassing the original £90 million target. In a show of confidence, management announced an annual £100 million share buyback programme and increased the interim dividend by 25 per cent to 5½p per share.

Despite delivering 12 per cent fewer homes (6,846) between July and December 2024 compared to the previous year, the company’s revenues rose by 23 per cent to £2.28 billion. The reduction in home completions was attributed to fewer active development sites, a consequence of limited land acquisitions during the mortgage rate crisis of 2023.

Looking ahead, Barratt Redrow has revised its annual home completion target to at least 16,800 units. While this represents a marginal decrease from the previous year’s output, the company maintains a positive outlook, citing stable reservation rates and improving market conditions as key drivers for future growth.