Sector scrutiny intensifies ahead of November reports
​The UK housebuilding sector is under fresh scrutiny ahead of upcoming trading updates from two of its biggest players, Barratt Redrow (due 5 November) and Persimmon (due 13 November).
​These reports will provide crucial information on how the housebuilding sector is addressing the challenges of mortgage affordability, planning uncertainties and construction safety costs.
​The timing is particularly significant as the sector faces continued debate over potential Stamp Duty reforms and evolving regulatory requirements that could affect demand and costs.
​Both companies represent different strategic approaches to the UK property market, making their comparative performance valuable in understanding the dynamics of the sector.
Barratt Redrow shows strength but lacks direction
Barratt Redrow enters the first quarter (Q1) 2026 sales and revenue release on 5 November after recording a strong performance for the year to 29 June 2025. Revenue rose 33.8% to £5.58bn and statutory profit before tax rose 60.5% to £273.7m.
Adjusted pre-tax profit (excluding the purchase price allocation from its merger) reached around £591.6 million, slightly above consensus expectations.
​The company completed 16,565 homes, an 18.3% year-over-year increase, but fell short of its previous guidance of 16,800-17,200 homes.
​While this indicates considerable momentum from the merger with Redrow, the company noted that the market remains “quite subdued”, pointing to uncertainties around the availability and affordability of mortgages.
​Future orientation and merger execution under focus
​Consequently, for the next report analysts will look beyond the headline figures and look to the future: can Barratt Redrow maintain its medium-term target of 22,000 homes a year?
​How resilient are margins given growing security remediation provisions (which have exceeded £1 billion) and land cost/inflation pressures affecting the entire sector?
​And how are merger synergies progressing, with investors keen to see tangible benefits from the combination beyond simply increased scale?
​The £1bn-plus safety remediation provision highlights the ongoing financial burden of historic build quality issues affecting the entire housebuilding sector.
​Persimmon targets the affordable housing segment
​On November 13, Persimmon will release its third quarter (Q3) 2025 revenue and sales update against a backdrop of improving trading earlier in the year, but still under pressure from macroeconomic challenges.
​Its half-year figures showed revenue of £1.5bn to June 30, 2025, up 14% on the previous year; New home completions totaled 4,605 ​​at an average price of £284,047 (an increase of around 8%).
​Underlying profit before tax rose around 11% to £164.9m (up from £149.2m), although core earnings per share (EPS) fell 10% to 31.2p.
Persimmon maintains its guidance for the completion of between 11,000 and 11,500 homes in 2025 and expects the operating margin to remain in the range of 14.2% to 14.5%.
​Proven strategic differentiation approaches
​Attention will now turn to how Persimmon plans to revitalize its forward sales and booking rate; whether its bias toward affordable and first-time buyers offers resilience in the current rates and affordability environment.
And how increasing regulation and input cost pressures could impact margins as the company navigates increasingly complex compliance requirements.
Analysts will also evaluate how strategic land and integration of manufacturing operations (bricks, frames) are translating into cost control and margin improvement.
Vertical integration offers potential cost advantages, but also creates operational complexity and capital requirements that must be carefully managed.
​Sectoral themes dominate the narrative
​In both cases, wider sector issues – mortgage affordability, uncertainty over tax planning and policy (including stamp duty concerns), construction safety remediation costs and consumer confidence – will influence the earnings narrative.
​Barratt Redrow, with its large-scale and recently merged operations, will be judged on growth execution and margin levers.
​Persimmon, with a more affordable housing proposition, will be evaluated based on how much traction it can gain amid a still-challenged market.
​The contrast between these two strategies provides valuable insight into which approaches are most effective in the current market environment.
​Possible catalysts for sector sentiment
​If either company can offer stronger-than-expected guidance or evidence of forward momentum (e.g., improving sales rates, cost control, healthy order books), that could change investor sentiment in the sector.
​Conversely, any weakness in reserves, margin compression or political or fiscal headwinds could weigh heavily on sector valuations.
​The strength of the forward order book will be particularly important to provide visibility into 2026 performance and demonstrate the resilience of underlying demand.
​Policy clarity on stamp duty and planning reforms would help reduce uncertainty, although the timing of announcements remains unclear.
Analyst Ratings and Technical Analysis
​Fundamental analysts rate Barratt Redrow and Persimmon a “buy” and have an average long-term price target of 1,493 pence, around 23% above the current share price for the former, and an average price target of 504.81 pence, around 36% above current levels (as of 04/11/2025), for the latter.
