Redrow profits climb, but housebuilder expects more normal conditions ahead

Redrow is still seeing good reservation levels even after a full stamp duty holiday ended, but the housebuilder expects the pandemic’s high sales rates will return to more normal levels.

The FTSE 250 company is among builders to have seen strong demand for properties over the last year, in part thanks to a stamp duty holiday enticing buyers.

Chief executive Matthew Pratt also told the Evening Standard: “People are reassessing what is important [to them], and there has been more demand for home offices, and some people moving further away from major urban hubs.”

In the year to June 27 Redrow recorded pre-tax profits of £314 million, which was ahead of City expectations. The figure for the prior 12 months was £140 million.

It completed sales of 5,620 homes compared with 4032 a year earlier when the company faced initial disruption from the pandemic, with construction sites and estate agency branches closed. In the year before that 6443 sales were done.

Redrow added that it ended the financial year with a record forward order book of £1.43 billion.

Pratt said the company had also been selling well beyond the latest stamp duty changes.

June was the last month buyers could enjoy a suspension of stamp duty on property sales of up to £500,000. From July 1 to the end of this month the threshold for the stamp duty holiday is £250,000.

John Tutte, the non-executive chairman of Redrow who is retiring from the business, said: “The buoyant housing market has moderated in recent months and we anticipate sales rates will return to historically average rates over the course of the current financial year.”

Redrow joined the list of housebuilders to have experienced higher costs for some materials. Pratt said: “There have been some supply interruptions and specific shortages in steel, timber and cement-based products.” Although he said the group has mitigated the impact of these interruptions.

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