One of the U.K.’s biggest homebuilders is to cut the number of houses it constructs by nearly a third next year as higher interest rates and stretched consumer budgets reduce demand for new properties.
The Newcastle-based builder said it expects its overall average selling price to fall 5% to £295,000 in the 2024 financial year, from £310,306 in 2023. Underlying profits fell 18.1% from the year before to £532.6 million . “It’s a miserable time to be a housebuilder despite operating in a country with a chronic housing shortage,” said Russ Mould, investment director at AJ bell. “Selling prices haven’t fallen off a cliff which is reassuring for the company. However, it is at the mercy of the mortgage market and the ability for aspiring homeowners to be able to afford a loan at the current elevated interest rates.”
“A strategic overhaul at Rolls-Royce…was well-received given savings which could amount to up to £200 million,” said Richard Hunter, head of markets at Interactive Investor. “The shares have had a stellar year so far, rising by more than 130%, as any number of factors have played into the company’s hands, not least of which has been the return to airline travel.”
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