The chief executive of housebuilder Redrow sees the market resetting after finding itself in “the eye of the storm” following last year’s mini-Budget – but has warned that a “broken planning system” remains a problem.
Redrow group chief executive Matthew Pratt predicts 2023 will be a challenging year. Pratt said: “The government’s disastrous mini-budget drove significant increases in mortgage rates during an existing cost of living crisis. Inevitably, consumer confidence was badly affected.
“Cancellations were elevated, driven higher by those customers who reserved prior to the mini-budget and who’d not secured a mortgage offer in advance of mortgage rate rises. All these factors combined to bring forward the traditional Christmas slowdown to October.”
In addition, Pratt said the planning system is contributing to housebuilder difficulties as planning permissions are taking well in excess of the statutory timescale of 13 weeks for reserved matters.
He added: “This means a huge missed opportunity for the country in lost school places, infrastructure, employment and social mobility. We continue to call on the government to revisit its housing and planning strategy to help the country deliver growth and the homes it so badly needs to address the chronic housing shortage.”
However, announcing Redrow’s results for H1 2023, Pratt said “consumer confidence has begun to show early signs of returning” as the political and economic picture has stabilised. Mortgage rates continue to reduce from their elevated levels. He added: “Early indications are better than anticipated and the market appears to be finding a new, natural level.”
In the six months to 1 January 2023, Redrow reported revenue of £1.03bn, 2% lower than in the same period a year earlier. The housebuilder’s profit fell by 2.5% over the same period to £198m.
