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Boost for Redrow reservations and prices

Redrow will today report that group reservations and prices are up 22 per cent in this financial year, and the landbank has grown by over a tenth.

Chairman Steve Morgan is expected to tell the company’s Annual General Meeting today that the firm has made “steady progress in what are challenging but stable market conditions”.

Mr Morgan recently announced that a consortium including his firm Bridgemere Securities would not be tabling an offer to takeover Redrow – which Mr Morgan founded.

That announcement came after seven weeks of negotiations, and the statement today confirmed: “There are no discussions ongoing”.

Reservations for the financial year to date are up 17 per cent in the regional businesses, and 22 per cent in the group as a whole, London included.

Cancellation rates are stable at just over 17 per cent.

The average price of private reservations to date has been 22 per cent ahead of the same period in the previous year, or 13 per cent when London is excluded from the firugres.

The firm says the figures reflect the popularity of the New Heritage Collection, while prices are stable across the wider market.

During this financial year Redrow says it has added 1,480 plots across 14 sites to the land bank, which now stands at 13,100 plots, or four and a half years’ supply at current rates.

Net debt has increased from £14m in June to around £90m at present, due to “ongoing investment in land”.

However, the firm insists that the balance sheet remains strong and that the firm is “well placed to pursue the right opportunities as they arise.”

The statement added that mortgage availability was the “principal constraint” on housing, but that government support was “pleasing”, and that initiatives such as NewBuy and FirstBuy, as well as moves to reform planning, have been “of great assistance”.

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