UKs Biggest Housebuilder Warns of Political Uncertainty Impacting Sales

The UK’s largest housebuilder, Barratt Redrow, has expressed concerns that upcoming political events could jeopardise its sales figures this year. With the spring statement and local elections approaching, the company foresees potential challenges in achieving its financial targets.

Since the beginning of the year, Barratt has reported a slight uptick in sales activity. The pre-budget speculation surrounding stamp duty and council tax has subsided, while mortgage rates have experienced a decline. However, company executives caution that overall success depends on sales performance during the key spring selling season, traditionally the busiest period for builders.

During the first half of the financial year, Barratt’s adjusted pre-tax profits fell by 14 percent to £199.9 million, down from £231.4 million in the same period last year. This decrease has been attributed to tighter profit margins exacerbated by increased sales incentives and rising build costs. Overall, house price inflation has remained minimal throughout this time.

On a statutory basis, the company’s half-year pre-tax profits nearly doubled to £156.2 million from £85 million. This change reflects accounting adjustments and a series of costs related to the acquisition of Redrow in the previous year. Subsequently, the interim dividend has been reduced by 9 percent to 5p.

Chief Executive David Thomas pointed out that political instability could affect planning committee approvals, which may delay major project approvals ahead of the elections. Despite these uncertainties, Barratt has been able to sell approximately 7 percent more homes in recent weeks compared to the autumn and winter, as speculation regarding a potential overhaul of the property tax system has died down.

Currently, Barratt aims to deliver between 17,200 and 17,800 new homes by the end of June. The company has also guided its annual adjusted profit before tax to fall within the range of £558 million to £617 million. Analysts have noted that forecasts might continue to decline in response to market challenges.

Between July and December, Barratt completed a total of 7,444 flats and houses, a 5 percent increase compared to the same timeframe in 2024. This increase can be partly attributed to a strong market start in 2025, with buyers rushing to complete transactions prior to an anticipated stamp duty increase in April.

As Barratt navigates these complexities, fluctuations in its share price have been observed, reflecting the market’s reaction to the company’s performance and external economic conditions.