Uk housebuilder Redrow confident about demand
British housebuilder Redrow today gave a clear signal that the housing market was in good health by predicting that demand would pick up over the next few months.
Chief executive Paul Pedley said the spring sales market would be an “important test” of consumer confidence but expected much interest from buyers.
A significant number of new developments will be launched to capitalise on demand and the company said 10% more outlets would be opened over the next six months than in the first half of 2004.
Mr Pedley said: “The housing market is fine. You have to stand back from the month-to-month figures and look at the broader market.
“We are certainly in the camp that believes the market will adjust sensibly back to normality and over the past seven months that has been very much the case.”
In a trading update ahead of its interim results in March, Redrow said its decision to protect margins by maximising the price of its homes was shielding it from the impact of the slowdown.
Buyers paid an average £175,000 (€249,000) for a Redrow home during the six months to December 31 compared with £152,700 (€217,200) over the same period last year.
But the Flintshire-based group expected the average selling price over the full year to be lower at £172,500 (€245,300).
According to Mr Pedley, this was not due to weakness in the housing market but because a smaller percentage of Redrow homes sold over the next six months will be in the south of England.
A total of 2,111 homes were completed over the past six months – up 6% on a year ago. Redrow added that its order book stood at 1,948 units and contracts had been exchanged on more than 85% of these homes.
The group, which has more than 1,300 staff, said the land market and construction costs were now moving in line with expectations of a more normal housing market.
“The quality and number of potential land opportunities has increased and Redrow remains cautiously active in the market,” the company said.
Redrow pledged to continue lifting its annual dividend by 20% and added that it was “well placed to capitalise on the market conditions of 2005”.
