Barratt Redrow has said that the housebuilding industry is "beginning to see more stable market conditions" in its first trading update as a combined group.

Since the combination of Barratt and Redrow on 22 August, the firm’s net private reservations per average week were 280 (237 in the 2024 financial year) and net private reservations per active outlet per average week were at 0.67 (0.49 in FY24) in the weeks to 13 October.

It said that it should be noted that the short period is a "seasonally strong part of the Autumn selling season", where elevated mortgage rates dampened reservation activity in the prior year comparative period.

Furthermore, when incorporating the combined group’s total home completion guidance for the 2025 financial year, Barratt Redrow was at 57% forward sold properties with respect to private wholly owned home completions, of which 64% are either completed or exchanged.

Chief executive at Barratt Redrow, David Thomas, said: "Whilst customer demand continues to be sensitive to the wider economy, we are beginning to see more stable market conditions with increased mortgage availability and affordability.

"It will take some time for customer confidence to fully recover from the macroeconomic headwinds faced over the past two years, but we are encouraged by the solid trading we have experienced over recent weeks."

Looking ahead, Barratt Redrow said that it is expecting to see stabilising conditions in line with increased mortgage availability and affordability, and although it will take some time for customer confidence to fully recover, the firm added that it is "encouraged by the solid trading" it has experienced in recent weeks.

It stated that the standalone Barratt operations expectations remain unchanged, and with the inclusion of Redrow’s order book and performance from the merger, it now expects to deliver total home completions of between 16,600 and 17,200 in the 2025 financial year.

In the medium term, it also plans to take this figure up to 22,000.

Equity analyst at Hargreaves Lansdown, Aarin Chiekrie, stated that with the results the "the enlarged group signalled that it’s got big plans ahead".

He concluded: "Sales rates are well ahead of the prior year, and there’s a strong landbank ready to be unleashed when the housing market recovers. Markets are pricing in interest rate cuts at every Bank of England meeting out to March 2025, which should ease mortgage availability and affordability pressures, and Barratt Redrow looks well placed to be buoyed by the rising tide.

"The enlarged group hopes to deliver at least £90m of cost savings by trimming the fat on overlapping processes. If operations can be streamlined and new homes delivered as expected, there’s plenty of opportunity for profits to rebound over the medium term. But as with any merger, there will be challenges along the way."

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