UK's Barratt Redrow sees stable housing market with better mortgage availability
Group sees 90 mln stg in cost efficiencies from Redrow acquisition
Group private bookings rate up 37% y/y in Aug. 22-Oct. 13 period
Adds share move in paragraph 2, analyst comment in para 8, CEO in para 9
By Aby Jose Koilparambil
Oct 23 (Reuters) -British homebuilder Barratt Redrow BTRW.L said on Wednesday it was beginning to see more stable market conditions with increased mortgage affordability, signalling improved sentiment in the UK's housing sector.
Shares in the FTSE 100 .FTSE company rose as much as 3.8% in morning trade.
British homebuilders have been cautiously optimistic as easing mortgage rates and supportive housing policies from the new Labour government boost recovery hopes in the sector.
"It will take some time for customer confidence to fully recover from the macroeconomic headwinds faced over the past two years," CEO David Thomas said in a statement.
The company, which acquired smaller rival Redrow this year, said the integration is expected to deliver at least 90 million pounds ($116.9 million) of cost efficiencies. Consultations are ongoing on five potential divisional closures announced earlier this week, it added.
Barratt Redrow said the private bookings rate for the combined group jumped about 37% during the Aug. 22 to Oct. 13 period, compared with the corresponding year-ago figures from the two businesses.
It expects to build between 16,600 and 17,200 homes in its fiscal year ending June 30, after incorporating Redrow's order book and performance following the deal's completion in August.
"Sales rates are well ahead of the prior year, and there is a strong land bank ready to be unleashed when the housing market recovers," Hargreaves Lansdown analyst Aarin Chiekrie said in a note.
CEO Thomas told analysts on a call that the group was looking to the UK budget announcement at the end of the month to see whether the government would announce an extension of a stamp duty holiday beyond its expected end in March 2025.
Britain's competition regulator cleared Barratt's 2.52 billion pound all-stock acquisition of Redrow earlier this month.
Midcap housebuilder Bellway last week said homebuyers, unnerved by the possibility of tax increases ahead of the UK budget, are delaying the decision to purchase.
($1 = 0.7700 pounds)
Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Abinaya Vijayaraghavan, Kirsten Donovan
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