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 share buyback aimed at boosting shareholder returns.
The FTSE 100 group said ministers must act on “the increasing regulatory and tax burdens that are constraining viability” in order to “unlock higher levels of housing delivery, including affordable housing”.
It argued that urgent reforms to taxation and planning rules were needed to “tackle the housing crisis, create jobs and drive economic growth”.
The latest intervention follows last week’s joint appeal by Barratt Redrow and Rightmove for the government to abolish stamp duty for first-time buyers in an effort to stimulate housing demand.
After showing signs of recovery earlier this year, the housebuilding sector has come under renewed pressure from rising construction costs. In April, Barratt Redrow said it would scale back land purchases because of a “less certain backdrop” after the Iran conflict drove up building cost inflation.
The company said on Wednesday that construction costs had risen by 3% following the outbreak of the conflict, taking average cost inflation for the year to 2%.
It also warned that recent volatility in energy markets and supply chains, fuelled by renewed tensions between the US and Iran, could push building costs even higher over the coming year.
Against that backdrop, the company announced plans to return £400million to shareholders during 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 macroeconomic and geopolitical uncertainty, alongside industry headwinds and subdued customer demand, which have weighed on market sentiment.
“However, this means that given our performance and resulting balance sheet strength, deploying capital through an expanded share buyback programme is currently the most effective way to create long-term shareholder value, and we intend to return £400million to shareholders in FY27, primarily through share buybacks.”
Phoenix Asset Management Partners, which owns around 5% of the business, welcomed the announcement.
Gary Channon, founder of Phoenix, said: “The board’s decision to return capital through buybacks, while the shares trade so far below their worth, is a step forward for shareholders.”
The buyback programme will begin immediately and is expected to conclude by the start of July 2027.
In its annual trading update, Barratt Redrow said it completed 17,667 homes in the year to the end of June, reaching the top end of its guidance. That total included 3,774 affordable homes.
Its forward order book was valued at £2.8billion, compared with £2.9billion a year earlier.
The company ended the financial year with net cash of £772million, comfortably above the £550million to £650million range it forecast in April. It said the stronger-than-expected position reflected lower spending on land acquisitions and delays to building safety remediation payments.
