UK's biggest housebuilders shrug off Brexit vote

Barratt, Redrow and Berkeley bounce back after post-referendum blip, defying predictions of lengthy slump

The housing market has emerged unscathed from the turmoil surrounding the UK’s vote to leave the EU, according to a trio of the country’s largest housebuilders.

Barratt Developments, Redrow and Berkeley Group, three of the UK’s top 10 housebuilders, said they had seen little sign of a lasting post-referendum slump.

In a statement accompanying its financial results for the year to the end of June, Barratt said the outcome of the EU referendum had heightened economic and political uncertainty.

But the chief executive said Barratt’s performance at the start of the new financial year had been largely unaffected by the Brexit vote, adding that the company was taking a “business-as-usual stance”.

“It [Brexit] is just no longer a point of discussion [between sales representatives and customers],” David Thomas said. “There’s strong consumer demand, good mortgage lending and that’s allowing us to build and sell plenty of homes.”

His comments, issued alongside results showing a 21% rise in pretax profits to £682m for the year leading up to the referendum, echoed similar assessments by rival firms.

Redrow, which this week reported annual pre-tax profits up 23% to £250m, said: “We have seen very little impact as a result of the Brexit vote.”

Berkeley Group was the only one of the three to give a detailed account of its Brexit strategy alongside a trading statement for the four months to the end of August.

The firm said it had deferred the release of new homes on to the market and that reservations for new homes fell 20% in the run-up to the referendum.

But it said the overall Brexit impact since the vote had been minimal. “After a hiatus either side of the referendum, the market in August, traditionally a quiet month, has returned to the relative levels reported for the first five months of the year,” said Berkeley.

“Pricing has remained resilient and above business plan levels with reservation cancellation rates at normal levels, following a temporary and expected increase after the UK referendum result.”

All three of the housebuilders had previously predicted that long-term factors underpinning the strength of the UK housing market would make it relatively resistant to a Brexit vote.

In a statement issued less than a week after the referendum result, Redrow said: “The fact remains that there is a long term underlying demand for new homes following decades of under supply. This chronic shortage of housing leaves market fundamentals unchanged.”

Berkeley, which wanted Britain to remain in the EU, said in the run-up to the referendum that London “will always be a world city and a highly desirable place to live, work and play”.

In July, Barratt warned that it might slow its housebuilding rate as a result of the Brexit vote, triggering a slump in its share price.

But it also said the housing sector was fundamentally strong thanks to government support, good mortgage availability and undersupply of new homes.


Rob Davies

The GuardianTramp

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