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UK housebuilder Barratt Redrow blamed interest rates and a shortage of international buyers as it reported lower than expected sales in its most recent financial year, sending its shares down more than 10 per cent on Tuesday morning.
The company, one of Britain’s biggest housebuilders, said it had sold 16,565 homes in the 12 months to the end of June, falling short of its April guidance of between 16,800 and 17,200.
Shares fell more than 10 per cent on the news in early trading, but recovered slightly to trade 7.6 per cent lower later in the morning.
The company said the sales shortfall was “mainly due to the impact of fewer international and investor completions than expected” in its London business. Demand had also been affected by consumer caution and mortgage rates not falling as quickly as anticipated, it added.
International buyers, who have buoyed UK house sales in recent years, have retreated from the market over the past six months in the face of economic and geopolitical uncertainty. That group includes people buying homes to live in or as investments.
On a call with analysts, chief executive David Thomas also pointed to affordability problems in London that had caused “substantially reduced first-time buyer numbers”.
Thomas said the company was looking at ways to attract buyers to the market, such as with rent-before-you-buy programmes, deposit-matching and a new shared equity product.
Barratt said it expects to sell between 17,200 and 17,800 homes in its 2026 fiscal year, a weaker outlook that also affected shares. It said it plans to build 22,000 homes a year in the medium term.
“The question is, how much of [the weaker housebuilding environment] is temporary frustration and delays?” said Aynsley Lammin, analyst at Investec, referring to the planning reform process. “The impact on the ground is slow to come through, but the expectation is it will come through into the winter and next year.”