Barratt Redrow has renewed his call for the next Prime Minister to cut taxes and reduce regulation to support the housing market, as the housebuilder unveiled a £400 million share buyback aimed at boosting shareholder returns.
The FTSE 100 group said ministers must act against “increasing regulatory and tax burdens that are limiting viability” to “unlock higher levels of housing supply, including affordable housing”.
It argued that urgent reforms to tax and planning rules were needed to “tackle the housing crisis, create jobs and boost economic growth”.
The latest intervention follows Barratt Redrow and Rightmove’s joint call last week for the Government to abolish stamp duty for first-time buyers in a bid to boost housing demand.
After showing signs of recovery earlier this year, the housing sector is once again under pressure due to rising construction costs. In April, Barratt Redrow said it would scale back land purchases on a “less certain backdrop” after the conflict in Iran pushed up construction cost inflation.
The company said on Wednesday that construction costs rose 3% after the outbreak of the conflict, bringing average cost inflation for the year to 2%.
It also warned that recent volatility in energy markets and supply chains, fueled by renewed tensions between the US and Iran, could drive up construction costs even further in the coming year.
Against that backdrop, the company announced plans to return £400 million to shareholders in the next financial year. Around £386 million will be distributed through share buybacks, with the remainder paid out as an ordinary dividend of 1p per share.
David Thomas, CEO of Barratt Redrow, said: “The sector continues to face macroeconomic and geopolitical uncertainty, alongside industry headwinds and weak customer demand, which have weighed on market sentiment.
“However, this means that, given our performance and resulting balance sheet strength, deploying capital through an extensive share buyback program is currently the most effective way to create long-term shareholder value.
Phoenix Asset Management Partners, which owns about 5% of the company, welcomed the announcement.
Gary Channon, founder of Phoenix, said: “The board’s decision to return capital through buybacks while the shares are trading below their year-to-date value is a step forward for shareholders.”
The buyback program will commence immediately and is expected to be completed in early July 2027.
In its annual trading update, Barratt Redrow said it delivered 17,667 homes in the year to the end of June, reaching the top end of its expectations. That total included 3,774 affordable housing units.
The forward order book was valued at £2.8 billion, compared to £2.9 billion a year earlier.
The company ended the financial year with net cash flow of £772 million, well above the range of £550 million to £650 million it forecast in April. It said the stronger-than-expected position reflected lower spending on land acquisition and delays in payments for safety repairs of buildings.