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Redrow and Countrywide report slowing sales as housing market stutters

Rhiannon Bury
Reservations for Redrow’s homes were 2pc above last year at 1,548 - Christopher Jones

There were further signs that the housing market is slowing as both housebuilder Redrow and estate agent Countrywide reported that trading has been more challenging in recent weeks.

Redrow had experienced a “slight slowdown in sales” in the last few weeks because of “ongoing political and economic uncertainty”, chairman Steve Morgan said on Thursday, although he added that the housebuilder had traded in line with expectations.

In an update to the market covering the last 18 weeks, Mr Morgan said that he didn’t anticipate that last week’s interest rate increase would have any adverse impact on the market as mortgage rates remain low and very competitive.

Despite recent slower market conditions, reservations for Redrow’s homes were 2pc above last year at 1,548. The sales rate over the period was 0.67 per outlet per week, slightly below the 0.68 in the same period in the 2017 financial year.

Meanwhile Countrywide, the UK’s largest listed estate agent, warned that profits for the year were due to be at the lower end of forecasts amid a housing market which “remains challenging”.

Revenue for the company was down 7pc on last year at £175.1m, although had picked up from the previous quarter thanks to a number of London sales. Elsewhere in the UK, the number of housing transactions had fallen, the company said.

Alison Platt, chief executive, said: “The market for housing transactions remains challenging and is likely to be down overall compared with 2016.”

Housing-related shares were dragged down across the board on Thursday, as shares in Redrow dropped as much as 5.92pc to 603.5p, while Countrywide fell as much as 8.35pc to 118p when the trading update was announced, before recovering later in the day.

The news follows the latest update from the Royal Institution of Chartered Surveyors, which found that confidence among estate agents was falling thanks to a lack of new housing stock, political uncertainty and the interest rate rise.

However, Clyde Lewis, analyst at Peel Hunt, said that the Budget later this month is likely to provide more Government support for the housing sector, which could give companies a boost.

“While macro concerns around Brexit will persist for a while longer, the level of government support for housing should see the new housing industry outperforming the wider economy,” he said.