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UK's Redrow says home sales to cool down to normal this year

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By Reuters
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– Mid-sized homebuilder Redrow Plc said on Wednesday that Britain’s red hot housing market had been cooling down in recent months and home sales should return to a more normal trend later this financial year.

The British real estate sector, supported by a temporary, COVID-19 tax break for homebuyers, has showed signs of moderating since a phasing out of the tax holiday began in June, but most housebuilders until now had pointed to strong demand trends continuing.

“The buoyant housing market has moderated in recent months and we anticipate sales rates will return to historically average rates over the course of the current financial year,” Redrow Chairman John Tutte said in the company’s annual earnings statement.

Redrow reported a more than three-fold year-on-year surge in pre-tax profit to 314 million pounds ($434 million) for the full-year ended June 27.

The company’s medium-term revenue forecast for financial year 2024 is above 2.2 billion pounds, compared with 1.94 billion pounds for 2021.

The FTSE 250 firm, which now focuses on heritage suburban homes that feature designs and finishes popular in the late 19th and early 20th centuries, also declared a final dividend of 18.5 cents per share after not paying one a year earlier.

Redrow, which started scaling back its London operations last year to focus on higher-return regional businesses, echoed its bigger rivals in saying higher house prices were making up for build cost increases, adding that it has seen “encouraging trading” in the new financial year.

($1 = 0.7236 pounds)