What's happened
UK housebuilders Barratt Redrow and MJ Gleeson released interim results showing resilience amid economic uncertainty. Barratt's profits fell slightly, but sales volumes increased. Market demand remains subdued but shows signs of improvement as the sector benefits from clearer tax guidance and easing mortgage rates. Full-year outlook remains positive.
What's behind the headline?
Market Resilience in a Subdued Environment
Despite a 13.6% drop in pre-tax profits to £199.9 million for the first half of 2026, Barratt Redrow's sales volumes increased by 4.7%, indicating underlying demand. The company completed 7,444 homes, with an average private home price of £392,900, up 5.21%. The market's stability was supported by a less volatile mortgage environment and customers rushing to complete purchases before Christmas, following the removal of budget-related uncertainty.
Sector Outlook and Risks
While the sector remains cautious, the outlook is cautiously optimistic. The company expects full-year home completions between 17,200 and 17,800, with profits reaffirmed at £558-617 million. The sector benefits from anticipated rate cuts and ongoing planning reform progress, which could boost delivery at scale. However, consumer confidence remains fragile, and affordability challenges persist, especially for first-time buyers.
Competitive Dynamics
Smaller rivals like MJ Gleeson reported profits halving due to soaring build costs, highlighting cost pressures across the sector. Barratt's merger with Redrow is expected to generate cost efficiencies and bargaining power, positioning it better for future growth. The sector's performance will depend heavily on economic stability and government policy support.
Forecast
The sector will likely see gradual recovery, with demand supported by easing mortgage rates and clearer tax guidance. However, continued economic and political uncertainty could temper growth, making the full-year outlook contingent on spring sales performance and broader economic trends.
What the papers say
The Independent reports that Barratt Redrow's interim profits fell slightly but sales volumes increased, benefiting from a less volatile mortgage environment and customers completing purchases before Christmas. Holly Williams notes that the company's outlook remains positive, with full-year profits reaffirmed. Reuters highlights that despite a 13.6% profit decline, the sector shows signs of recovery supported by clearer tax guidance and steadier loan rates. Contrastingly, MJ Gleeson reported profits halving due to soaring build costs, emphasizing ongoing cost pressures across the sector. The articles collectively suggest a sector in transition, balancing challenges with cautious optimism driven by policy and market stabilization.
How we got here
The UK housing market has faced ongoing challenges due to economic and political uncertainty, including tax and mortgage rate fluctuations. Barratt Redrow's acquisition of Redrow in 2024 positioned it as the UK's largest housebuilder, aiming to capitalize on planning reforms and market stabilization. The sector's performance is closely tied to broader economic conditions and government policies.
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Barratt Developments plc is one of the largest residential property development companies in the United Kingdom operating across England, Wales and Scotland. It was founded in 1958 as Greensitt Bros., but control was later assumed by Sir Lawrie Barratt.