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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

​​​Barratt Redrow and Berkeley trading updates amid economic pressures

Major UK housebuilders report trading updates as the sector navigates integration challenges, regulatory settlements, and hopes for planning reform.

Housing Source: Bloomberg images

Written by

Axel Rudolph FSTA

Axel Rudolph FSTA

Senior Technical Analyst

Article publication date:

Barratt Redrow and Berkeley 5-year share price total return

The share price of United Kindgom (UK) housebuilders has underperformed compared to other sectors in the UK blue-chip index.

Barratt Redrow and Berkeley share returns have not only been underperforming the FTSE 100 year-to-date (YTD), but also on a total return basis (including reinvested dividends).

Barratt Redrow and Berkeley YTD comparison chart

 

​Barratt Redrow and Berkeley year-to-date comparison chart ​Source: Google Finance
​Barratt Redrow and Berkeley year-to-date comparison chart ​Source: Google Finance

Over a 5-year span, the Barratt (and Redrow after the 2024 merger) share price returned a negative 7.37%. Although disappointing, it is significantly better than the share’s 5-year -28.73% return when dividends weren’t re-invested. 

​For Berkeley the picture isn’t much better, returning -7.97% on a total return basis over 5-years and a -18.91% when dividends weren’t re-invested. 

Barratt Redrow prepares to showcase merger integration

​As the UK housing market continues its gradual recovery, investors and analysts have awaited Barratt Redrow’s trading update and that of Berkeley Group (originally scheduled for later this week but no longer). These updates arrive against a backdrop of macroeconomic uncertainty, regulatory scrutiny, and an industry-wide pledge to support affordable housing. 

​When Barratt and Redrow merged in October 2024, the goal was to streamline operations and build up to 22,000 homes annually. The Tuesday 15 July trading update covering the fiscal year ending 29 June 2025 showed solid financial and operational performance. 

​The Group delivered 16,565 home completions, including joint ventures, though slightly below its guided range due to lower investor and international sales in London.  

​Nonetheless, adjusted profit before tax met market expectations, supported by early cost synergies from the Redrow acquisition and some margin improvement. Notably, £69 million of cost synergies have been confirmed, with £15 million already contributing to FY2025 results and an additional £45 million expected in FY2026. The integration of Redrow is progressing ahead of schedule, supported by a new divisional structure and a strong year-end net cash position of approximately £772 million.

​Looking ahead, Barratt Redrow remains cautiously optimistic amid ongoing market uncertainty. While high mortgage rates and cautious consumer sentiment continue to weigh on demand, long-term structural undersupply in the UK housing market supports the group’s medium-term goal to build 22,000 homes annually. The company projects FY2026 completions between 17,200 and 17,800, including around 600 JV completions.  

​The management welcomes government efforts to reform planning policy and increase support for affordable housing, emphasising that demand-side support for private buyers is also needed. With three leading brands, a robust land pipeline, and a well-executed integration of Redrow, Barratt Redrow believes it is strategically positioned to scale up delivery as market conditions improve. 

Berkeley Group benefits from two-speed market dynamics

Berkeley Group's next update is highly anticipated after RBC revised its recommendation upward on the stock, citing a two-speed market where Berkeley benefits from demand in its prime regional segments. Market commentary highlights improved enquiry levels and modest upticks in reservation rates.

The company shows sensitivity to potential planning reforms — moves that could accelerate its deliveries significantly. RBC and other analysts have noted that Berkeley's positioning makes it better insulated against inflationary pressures, labour shortages, and material costs.

These persistent industry-wide constraints continue to affect Berkeley's peers more severely. The company's focus on premium markets and strategic locations provides some protection against broader economic headwinds affecting the sector.

Berkeley's strong balance sheet and land bank position it well to capitalise on any improvement in market conditions. The company's cautious approach to land acquisition during uncertain periods has historically served shareholders well.

Industry faces regulatory settlement and compliance overhaul

On 9 July 2025, seven major housebuilders (Barratt Redrow and Berkeley among them) agreed to pay a combined £100 million to fund affordable housing. This settlement ends a Competition and Markets Authority (CMA) probe into alleged information-sharing practices, though no admission of wrongdoing was made.

Each firm committed to stronger competition compliance and will finalise payments should the CMA accept the deal by 24 July. This resolution removes an overhang of regulatory risk that has weighed on sector sentiment for months.

The settlement may help rebalance investor sentiment, providing a cleaner runway for upcoming trading updates. Regulatory clarity often proves positive for share prices as uncertainty premiums dissipate from valuations.

Industry analysts view the settlement as drawing a line under past practices while establishing clearer guidelines for future operations. This regulatory reset could support improved sector multiples going forward.

Economic backdrop presents mixed signals for construction

The Bank of England's Financial Stability Report described the UK's economic outlook as 'weaker and more uncertain', citing global trade tensions and bond market pressures. However, the report noted that the banking sector remains resilient, supporting continued mortgage lending capacity.

Material shortages, especially in bricks and skilled labour, are keeping build-out capacity constrained. These supply-side limitations help support pricing even as mortgage affordability gradually improves with stabilising interest rates.

Labour's ambitious 1.5 million homes-by-2029 pledge and signals of easing planning regulation have buoyed the sector recently. However, analysts warn that substantive planning reform may not arrive before late 2026, requiring patience from investors.

Current demand signals and trading updates become particularly pivotal for housebuilder valuations given this uncertain timeline. The sector's performance depends heavily on government policy implementation and economic stability.

Analyst sentiment shifts reflect sector divergence

RBC's recent sector ratings shuffle downgraded Bellway and Taylor Wimpey while lifting Berkeley and Persimmon, though Barratt Redrow's positioning remained unchanged. This reflects growing analyst recognition of performance divergence within the sector.

According to London Stock Exchange Group (LSEG) Data & Analytics, the majority of analysts have a ‘buy’ rating for Barratt Redrow, with a mean long-term price target of 563pence (p), 46% above the current share price (as of 14 July 2025).

Barratt Redrow historical trends and price targets

Barratt Redrow historical trends and price targets chart Source: LSEG Data & Analytics
Barratt Redrow historical trends and price targets chart Source: LSEG Data & Analytics

​Berkeley’s mean long-term upside target comes in at 4476p, up 5% from current share price levels (as of 15 July 2025) with 2 ‘strong buy’, 5 ‘buy, 7 hold’ and 3 ‘sell’ recommendations. 

Berkeley historical trends and price targets

Berkely historical trends and price targets chart Source: LSEG Data & Analytics
Berkely historical trends and price targets chart Source: LSEG Data & Analytics

Berkeley has a TipRanks Smart Score of ‘8 Outperform’ and is rated as a ‘buy’ despite 4 ‘buy’ and 4 ‘hold’ recommendations (as of 15 July 2025).

Berkeley TipRanks chart

Berkeley TipRanks chart Source: IG, TipRanks
Berkeley TipRanks chart Source: IG, TipRanks

The performance gap between premium-focused builders like Berkeley and volume builders highlights different business model resilience. Market conditions favour companies with stronger margins and balance sheets during uncertain periods. 

Share trading in housebuilder stocks requires careful analysis of individual company strategies and market positioning. Investors should consider both short-term trading dynamics and longer-term structural trends

Barratt Redrow technical analysis

The Barratt Redrow share price remains under pressure, having been rejected by its June 486.5p nine-month high.

Following its 15 July FY2025 trading update, its share price fell through the major 395.3p to to 384.1p support zone, which consists of the July 2023 to April 2025 lows. Due to inverse polarity, it may now act as resistance.

A fall through the 15 July low at 632.5p would put the March 2020 low at 349.4p on the map.

Barratt Redrow monthly candlestick chart

Barratt Redrow monthly candlestick chart Source: TradingView
Barratt Redrow monthly candlestick chart Source: TradingView

Berkeley technical analysis

In case of the Berkeley share price, it already probed its key 3634p to 3462p support zone in July and is currently revisiting it.

Berkeley monthly candlestick chart

Berkeley monthly candlestick chart Source: TradingView
Berkeley monthly candlestick chart Source: TradingView

For a sustained recovery, the Berkeley share price would need to overcome its early July high at 3930p, in which case its 3956p to 4130p price gap may get filled.

Berkeley daily candlestick chart

Berkeley daily candlestick chart Source: TradingView
Berkeley daily candlestick chart Source: TradingView

While the Berkeley share price remains below its 1 July high at 3930p, downside pressure is likely to be maintained with a retest of the key 3634p to 3462p support area remaining on the cards.

Market dynamics favour selective stock picking

The two-speed market dynamic creates opportunities for discerning investors willing to analyse individual company fundamentals. Premium builders with strong land banks and healthy margins continue outperforming volume builders facing margin pressure.

Planning reform expectations add another layer of complexity to investment decisions. Companies best positioned to benefit from streamlined planning processes may see significant re-rating if reforms materialise as expected.

Geographic exposure also matters, with builders focused on areas of strong employment growth and transport links likely to outperform. London and the South East continue showing resilience despite broader market challenges.

Trading platforms provide access to real-time housebuilder share prices and sector analysis. Professional investors increasingly use technical analysis alongside fundamental research when timing entries and exits.

Future outlook depends on policy implementation

Labour's housing targets represent the most ambitious homebuilding programme in decades, potentially transforming sector dynamics. However, delivery depends on planning reform, infrastructure investment, and skilled labour availability — all significant implementation challenges.

Interest rate trajectory remains crucial for sector performance, affecting both building costs and customer affordability. The Bank of England's policy decisions will significantly influence sector performance throughout 2025 and beyond.

The one to two UK interest rate cuts expected by market professionals before year-end should boost housing stock sales as mortgage rates would be expected to decline.

However, supply chain constraints continue limiting production capacity regardless of demand levels. Material costs and labour shortages require ongoing management attention and may persist despite government initiatives.

Commodity trading markets reflect these supply pressures, with construction materials facing persistent inflation. Builders must navigate these cost pressures while maintaining competitive pricing.

Investment considerations for housebuilder stocks

Dividend sustainability becomes increasingly important during uncertain periods, with some builders maintaining attractive yields despite operational challenges. However, investors should assess dividend cover and cash generation carefully before relying on income streams.

Balance sheet strength provides crucial downside protection during market volatility. Companies with lower debt levels and stronger cash positions typically outperform during economic uncertainty.

Management quality and strategic execution matter significantly in this sector. The ability to navigate planning systems, manage supply chains, and maintain customer relationships determines long-term success.

Contract for Difference (CFD) trading allows investors to gain exposure to housebuilder shares without full capital commitment. This approach suits traders seeking short-term exposure to trading update reactions.

How to trade UK housebuilder shares

  1. Research individual companies thoroughly before making investment decisions. Analyse land banks, geographic exposure, target markets, and management track records to identify the strongest investment opportunities within the sector.
  2. Consider both trading and investing approaches based on your time horizon and risk tolerance. Short-term trading around results announcements requires different strategies than long-term investment in sector recovery themes.
  3. Choose whether you want to trade or invest in housebuilder shares. Trading typically involves shorter-term positions, while investing focuses on longer-term sector recovery potential.
  4. Open an IG account to access UK housebuilder shares and sector analysis. Our platform provides comprehensive research tools and real-time market data for informed decision-making.
  5. Search for specific housebuilder shares on our platform or browse the construction sector to compare investment opportunities. Consider diversification across different company strategies and geographic exposures within your portfolio allocation.

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