Barratt Redrow has renewed its call for the next Prime Minister to cut taxes and reduce regulation to support the housing market, as the housebuilder unveiled a £400million dividend return aimed at boosting shareholder returns.
The FTSE 100 group said ministers must work on “growing regulatory and tax burdens that stifle performance” to “unlock higher levels of housing delivery, including affordable housing”.
It said urgent changes in tax and planning laws are needed to “address the housing crisis, create jobs and drive economic growth”.
The latest intervention follows last week’s call by Barratt Redrow and Rightmove for the government to end stamp duty for first-time home buyers in a bid to boost housing demand.
After showing signs of recovery earlier this year, the housing sector has come under renewed pressure due to rising construction costs. In April, Barratt Redrow said it would reduce land purchases due to “some background conditions” after the Iran conflict caused construction costs to rise.
The company said on Wednesday that construction costs rose by 3% following the outbreak of violence, taking annual inflation to 2%.
It also warned that recent volatility in energy markets and supply chains, fueled by renewed tensions between the US and Iran, could push construction costs higher next year.
In contrast, the company announced plans to return £400million to shareholders in the next financial year. Around £386million will be distributed through share buybacks, with the remainder paid as an ordinary dividend of 1p per share.
David Thomas, chief executive of Barratt Redrow, said: “The sector continues to navigate economic and global uncertainty, as well as industry headwinds and weak customer demand, weighing on the market.
“However, this means that when we look at our performance and the resulting strength of the balance sheet, capitalizing on the increased share buyback program is currently the most effective way to build long-term shareholder value, and we aim to return £400million to shareholders in FY27, mainly through share buybacks.”
Phoenix Asset Management Partners, which owns about 5% of the business, welcomed the announcement.
Gary Channon, founder of Phoenix, said: “The board’s decision to repurchase, while the shares are trading so far below their value, is a step forward for shareholders.”
The restoration process will begin immediately and is expected to be completed by early July 2027.
In its annual trading review, Barratt Redrow said it completed 17,667 homes in the year to the end of June, reaching the high end of its guidance. That total included 3,774 affordable homes.
Its previous order book was around £2.8billion, compared to £2.9billion last year.
The company ended the financial year with a net profit of £772million, up from the £550million to £650million figure it forecast in April. It said the stronger-than-expected situation reflected lower spending on land acquisitions and delays in construction of security maintenance payments.
