Market Watch: Spring sellers set to boost house builders

Share this article
Have your say

HOUSE builders Barratt Developments and Redrow are both expected to say that the spring selling season has been buoyant as new buyers rush to take advantage of a tax amnesty that ends next month.

Redrow is likely to say on Thursday that its turnaround has continued in recent weeks after it overhauled its range under the leadership of Steve Morgan, who three years ago returned to the company he founded in 1974 after it posted its worst ever set of results.

The Flintshire-based company had sold its unprofitable Scottish division and started one in London to reflect the strong demand for homes in the capital. When it last updated the market, it said pre-tax profits rose to £25.3 million in the 12 months to 30 June, compared to just £700,000 the previous year.

Barratt has focused on building more family homes in the affluent southeast of England, helping its average selling prices increase 4 per cent to £200,000 in the six months to 31 December. It is expected to say on Wednesday that its operating profits increased 40 per cent to £61m as it benefits from buying cheaper land after the recession.

The mild weather in the final months of last year will see Centrica’s residential arm – British Gas and Scottish Gas – report its lowest profit in three years on Thursday.

The UK’s biggest gas supplier is expected to report a 25 per cent fall in profits to £550m at its household energy business in 2011, as the mild weather allowed customers to turn down the central heating.

But the group is poised to report record overall profits of £2.5 billion, up 4 per cent on the previous year, as its upstream business smashes through the £1bn barrier for the first time. The division is tipped to see a 38 per cent increase in profits to around £1.1bn.