Business

Redrow profits knocked by Covid-19 disruption hitting housing market

Redrow is creating homes at Colindale Gardens in London
Joanna Hodgson
16 September 2020

The housing market has bounced back since Covid-19 disruption dragged down profits at Redrow, but the builder has said the Government needs to look at longer-term stamp duty reforms.

The FTSE 250 company, which in June announced plans to trim operations in London and focus outside the capital, said it had a “very limited” number of completed sales in the final quarter.

Executive chairman John Tutte said: “We had this spell of around six weeks where absolutely nothing was happening.”

In March estate agent branches closed, many construction sites shut and viewings stopped due to the lockdown. Restrictions were eased in May.

In the year to June 28 Redrow said revenue fell to £1.3 billion from £2.1 billion and pre-tax profit fell to £140 million from £406 million.

The shares decreased 8.59p to 447.61p.

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Estate agents see jump in enquiries after stamp duty changes announced

Estate agents see jump in enquiries after stamp duty changes announced

In July Chancellor Rishi Sunak introduced a stamp duty holiday to March 2021, giving the market a boost. Redrow said it entered the new financial year with a record order book and demand has been strong.

Tutte said: "The Covid-19 pandemic had a profound impact upon the group's performance in the 2020 financial year but we entered the new financial year in a position of strength.”

He added: "We brought forward an order book of £1.42 billion: up 39%, and reservations, in terms of value, in the first eleven weeks of the new financial year, are 12% ahead.”

Tutte said: “At the moment there is a recovery in the market. What we don’t want is that to be a short-term recovery. It needs to be a sustainable recovery.” He urged the Government to look at longer-term stamp duty reform.

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