Barratt Developments, the UK housebuilder, is taking over Redrow in a £2.5bn (€2.9bn) merger between two UK publicly listed residential developers that could lead to the company providing a wider array of housing formats.
Redrow is known for what is referred to as an upmarket product and has agreed to the takeover.
Steve Morgan, Redrow’s founder and biggest shareholder with 16%, has accepted the terms.
UK house prices have been going down but rose in January for the fourth consecutive month.
It was only last September that Barratt said the outlook was ‘murky’ and that it was ‘doing everything it can to weather the storm’.
But on Wednesday in a trading update, the company said that although the operating environment was ‘still challenging’ there were some encouraging signs.
David Thomas, CEO, said: ‘Despite the challenging macroeconomic backdrop, underlying demand for our homes is strong. Since the start of January, we have seen early signs of improvement in both reservation rates and buyer sentiment, helped by expectations of lower interest rates and the introduction of more competitive mortgage rates.’
That is in contrast to last September when the company said mortgage rates had increased significantly over the past year and had been highly volatile from ‘one week to the next’ making it very difficult for home buyers to plan their next move. First time buyers have experienced even greater pressure, given the limited availability of high loan to value mortgages and the end of the Help to Buy scheme in England,' a company representative said.
Another housebuilder Crest Nicholson issued a profit warning last August.
