House builder shares jump following Brexit

House builder Redrow shares have jumped following Brexit, with Redrow seeing record increase in profit.

Redrow has seen profits up 23%, in a record breaking increase to £250M, compared to £204M last year, feeling confident despite uncertainty for the market following the vote.

Chaired by Steve Morgan, Redrow have been through an ambitious growth which has over the year lifted legal completions 17% to deliver over 4,700 much-needed new homes.

Morgan said that the government Help to Buy Scheme which enables first time buyers to get on the property ladder had helped with spurring on the 17% climb.

Over the last three years, legal completions are up 67%, turnover more than double and profits have rocketed to 262%.

A rise in house prices also helped. In 2014-2015, Redrow’s average selling price was £269,800; this rose to £288,600 this year.

The ramp up in business has expanded Redrow’s workforce over the year from 1,600 people to just under 2,000 adding over 300 direct jobs.

Steve Morgan said: “Sales in the first 10 weeks are very encouraging and up 8% on a strong comparator last year.

“We have recently launched a number of significant new sites and have a strong pipeline in the planning process.  Our strategy is to continue to grow the business, increasing the number of outlets and hence the number of homes we build.”

He said that the government Help to Buy Scheme, which enables first time buyers to get on the property ladder, was responsible for spurring on the 17% climb.

However, in a report published by Berkeley Group, it said: “Government policy, which has been helpful outside London, has had a negative effect on the capital.

“Transaction taxes are now too high and this is restricting both mobility in the second hand market and the pace of supply and delivery of new homes in London and the south east.”

Berkeley suffered a 20% drop it its share prices following Brexit however shares climbed more than 3% this morning as it reiterated its guidance of £2Bn of pre-tax profit over the three years to 30th April 2018.

 

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