Housebuilders’ share prices rally in early trading

After Redrow released a statement affirming its strong financial position, its share price climbed nearly 10 per cent as other housebuilders’ shares also rebounded June 28, 2016 / Isla MacFarlane
Housebuilders’ share prices rally in early trading

Redrow’s share price climbed nearly 10 per cent in the early hours of trading, to around £3.29, following a statement assuring investors that its strong performance will result in a pre-tax profit above £240 million.

“In the run up to the EU referendum there was no impact on house sales or visitor levels,” Redrow said. “Although it is too early to tell whether Brexit will have any effect on future sales, initial feedback is that sites remain busy, reservations continue to be taken and, indeed, we witnessed long queues and strong reservations at new sites launched last weekend.

“The fact remains that there is a long term underlying demand for new homes following decades of under supply. This chronic shortage of housing leaves market fundamentals unchanged. The new homes market remained strong throughout the period as the mortgage market continued to improve. The value of private reservations achieved for the year, driven by strong regional growth, was a record £1.56 billion, up 46% on 2015 (£1.07 billion). The Private Order Book at the end of June 2016 is £807 million, up over 50% on June 2015.”

Taylor Wimpy, one of the worst hit by the turmoil sparked by Brexit, rose around six per cent. Barrat Homes Developments and Persimmon also saw share prices rise around five per cent.

Bovis Homes joined Redrow as a star performer, up nearly 10 per cent. Although its share price of £7.11 is still a far cry from the high of £10.24 seen before the market closed on the eve of the referendum.

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