Barratt Redrow, one of Britain’s largest housebuilders, is scaling back its land acquisition plans, citing increased uncertainty linked to global events, which could put further pressure on the government’s housing targets.
The company said it now expects 7,000 to 9,000 plots to be approved for purchase in the current fiscal year, down from the earlier guidance of 10,000 to 12,000. It said recent geopolitical developments have made it more cautious about committing to new sites.
Barrett Redrow said the more uncertain outlook, including potential impacts on mortgage rates and construction costs, has led it to take a more selective approach to purchasing land. As a result, the estimated spend on the land has been reduced to between £700m and £800m, compared to the previous expectation of £800m to £900m.
The announcement is as follows: Berkeley Group took a similar step earlier this monthDevelopers have halted new land purchases in response to market volatility.
Changes among major housebuilders have raised fresh questions over the feasibility of the government’s target of building 1.5 million homes in five years. The latest figures show that production is falling short of the pace needed to meet that ambition.
Data from the Center for Policy Studies indicate that in Labour’s first year in office, 140,860 homes were completed in England, while fewer than 116,000 homes were started – short of the required annual target of around 300,000.
Although ministers have introduced planning reforms and pledged £39 billion for a long-term affordable housing programme, the sector still faces headwinds including increased borrowing costs, rising construction costs and planning constraints.
Despite the more cautious stance on land, Barrett Redrow said it does not expect the current global tensions to impact its performance in the short term. The company said around 95% of its sales target for the year had already been secured and reiterated its guidance of delivering between 17,200 and 17,800 homes, along with a pre-tax profit of £568m.