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UK's Redrow says demand moderating in housing market

·1-min read
FILE PHOTO: The company logo of construction company Redrow is pictured on a flag at a new housing development near Manchester northern England.

(Reuters) -Britain's Redrow said on Wednesday housing demand was moderating to historical levels following two strong years for the sector as UK housebuilders brace for a tough market, hurt by rising mortgage rates and a worsening cost-of-living crisis.

The UK housing sector has shown signs it is losing some momentum, with surveyors reporting fewer new-buyer inquiries in recent months and mortgage approvals for house purchases falling below pre-pandemic levels.

"Given rising inflation and higher interest rates, it is not surprising the buoyant housing market has moderated recently and demand has returned to historically average levels," said Non-Executive Chairman Richard Akers in a statement.

The FTSE 250 firm retained its annual revenue guidance for the 2024 fiscal of 2.3 billion pounds to 2.4 billion pounds ($2.64 billion-$2.76 billion).

The company, which has started focusing on high-return regional businesses, said underlying pre-tax profit jumped 31% to 410 million pounds for the 53 weeks to July 3, while revenue climbed 10% to 2.14 billion pounds.

Redrow, which now focuses on "heritage" suburban homes that feature designs and finishes popular in the late 19th and early 20th centuries, declared a final dividend of 22 pence per share.

($1 = 0.8701 pounds)

(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Krishna Chandra Eluri)