Redrow plc (RDW.L)
- Reuters
UK mid-sized homebuilders expect sustained demand beyond tax break
Smaller rival Crest Nicholson Holdings also predicted demand to be resilient after the property tax break for first-time buyers ends in September. The government incentives, including a mortgage guarantee scheme, coupled with increasing demand for spacious properties during lockdowns, have helped homebuilders outshine the wider real estate sector during the pandemic. Redrow, which exited its London operations to focus on other regional businesses, said it expects turnover to rise about 45% to 1.94 billion pounds for fiscal 2021, and 2 billion pounds in fiscal 2022.
- Yahoo Finance UK
UK construction boom hits 24 year high as raw materials run low
Reopening and the UK's ongoing housing boom spurred strong activity across the industry.
- The Telegraph
Questor: annual house price growth of 10pc makes Redrow a strong option
House price growth of 10pc over the past year has fuelled concerns of a bubble. After all, it is the fastest pace of growth since shortly before the last housing market crash in 2007. However, in Questor’s view there are numerous catalysts that could maintain the upward trajectory of house prices over the long run. They could benefit housebuilders such as Redrow. Notably, government policies should provide support to the housing market. The updated Help to Buy scheme and recently launched mortgage guarantee scheme mean that first-time buyers require only a 5pc deposit. As a result the schemes will help prospective buyers to overcome what has become a significant hurdle to purchasing their first home. Their task will be further aided by today’s extremely low interest rates. The cost of mortgages has been reduced to such an extent that repayments make up around a third of the average UK salary despite house prices reaching record levels in recent months. This figure is similar to the 25-year average and suggests that mortgage repayments are currently affordable for many would-be homebuyers.
