Redrow warns red-hot market is now slowing

ReDROW said the red-hot property market is now cooling after official figures showed prices rising at the fastest pace for 20 years.

The Office for National Statistics has said average house prices in the UK rose by 15.5pc or £39,000 in the year to July to an all-time high of £292,000 – the biggest percentage increase since May 2003.

But, striking a more cautious tone while posting record revenues and profits, the FTSe 250 housebuilder’s chief executive Matthew Pratt said: ‘Over the last two years the market has been incredibly strong with elevated demand, partly resulting from people’s changed priorities around working from home.

‘We are now seeing a return to a more normal market where demand is moderating to historical levels.’

Chairman Richard Akers added: ‘Given rising inflation and higher interest rates it is not surprising the buoyant market has moderated.’

Redrow sold 5,715 new homes in the 12 months to July 3, 95 up on the previous year.

But with prices rising, revenue was up 10pc to £2.14bn, with underlying profits jumping 31pc to £410m, beating the record of £406m in 2019.

Overall profit fell 22pc to £246m after it put aside £164m to address high-rise block fire safety issues. Its shares fell 0.3pc, or 1.6p, to 474.6p. Charlie Huggins, head of equities at Wealth Club, said: ‘Make no mistake – the biggest reason for Redrow’s success is high house prices and the general strength of the market.

‘ That is something over which it has no control, and the big bad wolf of recession could be about to blow away the good times.

‘If interest rates keep rising, it’s hard to see how housing would be immune.’