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Redrow cautious over housing market

Housebuilder Redrow says uncertainty surrounding the outcome of the General Election next month and a lack of mortgage funding are likely to continue to drag on a recovery in the sector.

The company said it expects to complete in excess of 2,500 homes for the full year which will return it to profitability in the second half, but it still expects the market to remain tough.

An interim management statement from the firm, based at Ewloe, near Chester, said that its house prices were remaining stable, despite supply picking up in some areas.

It has secured or agreed terms on 2,500 plots on 18 new sites in 2010 and it plans to pick up more sites before the end of the year.

While sales are still far below their peak in 2007, Redrow said sales rates per site are now “comfortably” ahead of what they were last year with both visitor levels to its show homes and cancellations remaining steady.

The company expects its “New Heritage Collection” of family homes to be popular and help boost sales. They combine a traditional Arts and Crafts style exterior with high specification open plan interiors.

Redrow said customers have greeted the new designs positively and the collection is now featured in 13 show areas around the country, which will increase to 20 by the summer.

In its interim statement the company said: “Given the uncertainties surrounding the election, the economic environment and continued restrictions on mortgage availability, we expect the market to remain challenging throughout 2010.

“Nevertheless, with our strong management team, re-focused business, robust finances and the launch of The New Heritage Collection we are confident the business will continue to make progress.”