In its annual report, the construction company acknowledged that the first 10 weeks of the new financial year had seen demand “moderate to historic levels”.
Redrow put the ‘moderation’ down to a combination of soaring inflation, higher interest rates and the ongoing cost-of-living crisis.
Non-executive chairman, Richard Akers, said: “Given rising inflation and higher interest rates, it is not surprising the buoyant housing market has moderated recently and demand has returned to historically average levels.”
Redrow’s chief executive, Matthew Pratt. echoed the sentiment.
He said: “Over the last two years the market has been incredibly strong with elevated demand, partly resulting from people’s changed priorities around working from home. We are now seeing a return to a more normal market where demand is moderating to historical levels.”
Strong fundamentals and a green difference
However, Pratt was still optimistic about the overall state of the market.
“The fundamentals of the market remain good,” he said. “Interest rates, despite recent increases, are at historically low levels; mortgage availability is very good and employment levels are strong.”
He also pointed out that a more energy efficient approach to housebuilding would set the firm part.
He said: “It’s clear our new homes will have a growing and additional point of differentiation from the second hand market around energy efficiency.”
The annual report noted that green finance and mortgages are also becoming increasingly available and better value for money.
In terms of its annual performance, the company said underlying pre-tax profit was up 31 per cent to £410m for the financial year to 3 July 2022, while revenue climbed 10 per cent to £2.14bn.
