Like all FTSE 100 housebuilders, Barratt Redrow had a tough year in 2025. The housing market staggered along, hampered by higher interest rates and economic uncertainty, while investors and housebuilders themselves waited for the Labour government to act on their pledge to boost the housing market.
Barratt investors are still waiting. The housebuilder completed 16,565 homes during the year, down 7.8% from Barratt and Redrow’s combined total of 17,972 in the previous year.
Despite the drop in completions, there are reasons to be optimistic. Net private reservations per active sales outlet climbed to 0.64 per week – a notable improvement from the aggregated performance of 0.55 for both Barratt and Redrow in FY24.
However, the London market proved particularly challenging. Lower than expected completions from international customers and private rental sector investors affected Q4 performance, pushing total completions slightly below the company’s guided range.
The group announced a share buyback, but it wasn’t enough to offset the disappointment around slow completions. Shares were down 8% at the time of writing.
“Barratt’s £100m buyback will please shareholders, but it does little to mask the challenges facing Britain’s biggest housebuilder,” said Mark Crouch, market analyst for eToro.
“As completions for the year missed guidance, management pointed to softer investor and international demand in London, another sign that the capital’s housing market is faltering. The merger with Redrow was pitched as a sector-defining move, yet the market response has been largely indifferent. Strategic logic around scale and land pipeline depth is sound, but synergy alone isn’t enough to lift sentiment.”
Forward sales improvement
Investors will be pleased to see the forward sales position improving during FY25. Total forward sales reached £2.92bn at year-end, representing 9,835 homes. This compared well to the aggregated position of £2.64bn for 9,426 homes in the previous year.
Contractually exchanged homes comprised 67% of the order book, providing visibility for future deliveries. The total average selling price increased to approximately £344,000, with private sales averaging £380,000.
The Redrow acquisition is yielding tangible benefits ahead of schedule. Barratt Redrow has confirmed £69m of cost synergies against its target of at least £100m. Approximately £15m of these synergies contributed to FY25 profits, with a further £45m expected in FY26. The group is well placed for the eventual pick-up in the UK housing market.
Outlook
The slowdown in activity during 2025 was well telegraphed. There were few surprises in today’s numbers, and investors will look to the future for reasons to be optimistic.
For FY26, the company anticipates total home completions between 17,200 and 17,800, including approximately 600 from joint ventures. This would represent a welcome increase on 2025’s completions, but would still lag the combined total of completions in 2024.
“Although demand during the year has been impacted by consumer caution and mortgage rates not falling as quickly as hoped, there remains a long-term structural under-supply of housing in this country,” said David Thomas, Chief Executive of Barratt Redrow.
“Our increased scale, three market-leading brands and strong land pipeline put us in a unique position to rapidly accelerate volume delivery as consumer confidence strengthens and the benefits of planning reform materialise at a local level. We remain confident in our medium-term ambition to deliver 22,000 high-quality homes a year, and in the long-term demand for our high-quality homes.”