pre-Covid According to statements made by the company’s chief executive, Matthew Pratt, there is “still some distance to go” before the increased cost of house loans begins to have an impact on the sector.
Despite the fact that interest rates are rising, there is still a great deal of competition in the mortgage market. Throughout history, the [interest rate] in the UK has hovered around 5%; nevertheless, we have a long way to go before we reach that level. Base rates have been raised by the Bank of England six times in a row, bringing them to 1.75 percent, and it is anticipated that they will be raised one more the following week.
As a result of the reduction in the number of times that individuals have to drive to work, according to Matthew Pratt, people are willing to travel longer to get to their jobs, which is helping to boost demand for larger residences that offer more outside space. The detached family homes with four bedrooms are Redrow’s area of expertise.
“We took a deliberate decision to move outside of London and target for commuter areas – people who were doing five day a week journeys are now down to two or three days, and they are prepared to go further… They will agree to finish the job in one and a half hours rather than less than an hour. They still desire excellent links into London, but they are moving further out from the city.
For the fiscal year that ended on July 3, Redrow announced an underlying profit before tax of £410 million, which represents a 31% increase and a new record. The revenue broke another record by increasing by 10% to slightly over £2 billion. The average price for a private sale was raised by 9% to reach £428,000, while the average selling price for affordable housing went up by 2% to reach £165,600.
In its statement of financial results, the business mentioned that there were indications that the housing market was “moderating,” but that it had returned to more “normal” and “historical” levels after the surge in demand that was caused by the Covid lockdowns.
The market over the past five years has been “extremely strong,” according to Matthew Pratt, who noted that there are “many buyers for every block.” He told the Standard that maintaining that level was impossible and that it was not sustainable.
The price of a share of Redrow grew by 1%, reaching 481p.