Redrow is trading at 326p, down 1.4% as traders gear up for the first quarterly figures which are released tomorrow morning. Redrow is a victim of its own success; in September, the firm revealed a 63% jump in full-year profits and this week we had strong results from a number of other UK homebuilders. Bovis Homes, Persimmon and Taylor Wimpey all posted an increase in full-year profits of 48%, 49% and 39% respectively, and traders are taking their profits early on Redrow as the perception is that tomorrow's first-quarter results will be good.
All the British house builders have benefited from the Funding for Lending scheme, as it directed first-time buyers to new homes. Although the Bank of England decided to do away with this scheme at the end of last year, due to fears it could lead to a housing bubble, during the week the British Bankers Association revealed that UK mortgage approvals are at their highest level since September 2007. I think the British property market is now strong enough to stand on its own two feet.
The 50-day moving average is providing support at 321p. If we take out the 332p level it could set us on a path to the recent high of 347p.