Housebuilder Redrow has cheered annual profits returning to pre-pandemic record levels but cautioned over a cooling housing market amid the cost-of-living crisis.
The group said the buoyant market was “moderating”, with a return to “more normal” homebuyer demand due to rocketing inflation and rapidly increasing interest rates.
We are now seeing a return to a more normal market where demand is moderating to historical levels
Redrow put faith in its strong forward order book – up 1% at £1.44 billion as of July – to help it weather the wider economic woes while it hailed an “excellent” past year for the group.
Results showed underlying pre-tax profits jumped 31% to £410 million in the year to July 3, back to the all-time highs seen before the pandemic struck.
Matthew Pratt, group chief executive of Redrow, said: “Over the last two years the market has been incredibly strong with elevated demand, partly resulting from people’s changed priorities around working from home.
“We are now seeing a return to a more normal market where demand is moderating to historical levels.”
It said the recent cooling off was not surprising “given rising inflation and higher interest rates”.
The group notched up a 10% rise in full-year revenues to £2.14 billion.
Private sale house prices rose 9% to £428,200 on average – helping more than offset surging build costs, which leapt 10% higher over the year, though Redrow said material shortages and supply woes were easing.
On a statutory basis, pre-tax profits fell 22% to £246 million as they were knocked by £164 million put aside due to its pledge to address high-rise block fire safety issues in the wake of the Grenfell Tower tragedy.