Redrow: Housing market returning to normal
Housebuilder Redrow has revealed that the UK housing market has begun to normalise and warned of potential planning problems in the runup to the election.The company reported that market conditions have returned to normal after the high demand for new homes generated by the government's Help to Buy scheme in summer 2013.Combined with a lack of availability on the group's sites, this resulted in a sales rate per outlet per week for its regional businesses of 0.65, compared with 0.87 in the summer of the previous year."During the last ten weeks we have experienced a traditional autumn market and the sales rate, excluding London, was 0.68, in line with last year," chairman Steve Morgan told the group's annual general meeting.Cancellation rates remain at historically low levels, while the average selling price of private reservations in the year to date is four per cent ahead of the same period last year, at £284,000.The firm also reported a strong private order book, which was up ten per cent year-on-year at £465 million. Its regional order book rose by 25 per cent.However, Mr Morgan revealed that planning was proving to be a particularly problematic area for the company."Whilst the planning system at a strategic level has improved over recent years, obtaining detailed consents and clearing countless unnecessary conditions remains a significant constraint on new outlet openings and growth," he said.He added that "political posturing" ahead of the next general election was already affecting the time taken to grant planning permissions in many parts of the country.Last week, another housebuilder, Persimmon Homes, also identified planning as a problem area, stating that it was acting as major constraint on opening new development sites without undue delay.Redrow also reported a reduction in its net debt from £173 million in June to around £120 million currently, with the figure expected to be around £150 million at the end of December 2014. Its balance sheet remains strong and it is well-placed to continue to invest in new sites.
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