Redrow warns of continuing pain

NORTH West housebuilder said today that pace of the fall in house prices has slowed down but warned the market will remain challenging into 2010.

The Flintshire-based group, which is now back in the hands of its founder Steve Morgan after a boardroom coup that saw the resignation of chief executive Neil Fitzsimmons, said the with sales volumes in the housing market seeming to have stabilised, it is recommencing construction on certain developments and starting new sites from its existing land bank

The group said: “Interest in the land market generally is re-emerging though the number of transactions actually being completed remains relatively low.

“We will pursue such opportunities carefully with a focus on Redrow’s historic competitive strength of traditional family housing

“Our businesses are actively replanning sites for this new range and consequently reducing the number of apartments and three storey housing within the land bank.”

Redrow said the actions should ultimately lead to an increase in the average selling price as it aims to return to its historic position of a “premium brand within the sector”.  

It added the government’s home buy direct initiative has had limited impact to date though it expects this to assist first time buyers in the months ahead.

The group’s net debt is currently £235m, within its committed bank facilities of £425m. Redrow added it is well placed to reduce net debt to meet its targeted level of £225m at the end of June.