But firm cuts back on land buying and says higher energy bills will increase build costs next year
Barratt Redrow expects the Middle East conflict to have “limited impact” on its full-year performance for 2026, the firm has said in a trading update.
Chief executive David Thomas said the firm had experienced a “solid third quarter, with a resilient reservation rate underpinned by good customer demand”.
“Despite heightened macroeconomic uncertainty, we expect the Middle East conflict to have limited impact on FY26 performance, given our strong forward sales position and advanced build programme,” he added.
But the firm said it was cutting back on buying new land with the amount of plots bought this financial year now expected to be between 7,000 and 9,000 because of the war in the Middle East.
It admitted: “[This is] below our previous guidance range of between 10,000 and 12,000 plots and land spend of between £700m and £800m, from our previous guidance range of between £800m and £900m.”
It added: “With a less certain backdrop, given recent geopolitical events and their likely impact on mortgage rates and build cost inflation, we are being even more selective.”
Earlier this month, Berkeley said it was also putting the brakes on buying new land and instead concentrating on its existing 50,000 homes landbank. It pinpointed regulatory burdens and costs, as well as reduced confidence in a near-term market recovery for issuing a rethink on strategy.
Meanwhile, in the 13-week period from 29 December 2025 to 29 March 2026, Barratt Redrow reported a net private reservation rate (excluding private rental and multi-unit sales) of 0.64, up 3.2% on the comparable period the year prior.
Barratt Redrow maintained the 2% build cost inflation forecast for FY26, which it set out in its February interims.
However, it recognised that “higher energy costs are likely to be reflected in increased building material costs in FY27” and said it would have “better visibility” on FY27 build cost inflation by the time of its next trading update in mid-July.
Thomas, who is due to step down later this year, said Barratt Redrow was “on track” to deliver between 17,200 and 17,800 homes in the full-year and pre-tax profit “in line with consensus expectations”.
Source: Building.co.uk