Redrow on firm foundations in London

Housebuilder Redrow has spoken of 'steady progress in what are challenging but stable market conditions', much of this driven by London sales.

The company was at pains to stress that: "Mortgage availability remains the principal constraint on the sector and there will not be a significant recovery in housing numbers until this situation is resolved."

In a trading update for the first 19 weeks of the current financial year, Redrow revealed that although house sales per outlet were only marginally up at 0.58 a week, compared with 0.55 in 2011, the number of outlets has increased to an average of 83 outlets, compared with 72 last year.

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The number of reservations for the year to date increased by 17% in the regional businesses and 22% for the group as a whole, including London. Cancellation rates have remained stable at just over 17%.

The average price of private reservations to date is 13% ahead of the same period last year, at £223,000 excluding London and up 22% at £243,000 when London is included. This reflects both the increased percentage of its sales coming through the its New Heritage Collection and the impact of the London business.

In the wider market, Redrow said that "house prices have remained stable, as indeed they have over the last two years".

Since the beginning of the new financial year it has added 1,480 plots across 14 sites to its current land bank. The total current land bank, both owned and contracted, now stands at 13,100 plots, representing just over four and a half years' supply at current sales rates.

As a result of the ongoing investment in land its net debt has increased from £14m in June to around £90m now, representing a gearing level of 16%.

Redrow's half-yearly results for the six months ending December 31st are due to be announced on Wednesday February 27th 2013.

CM