Our hypothesis on UK housebuilders has been there the industry is fundamentally unhealthy - building homes costs too much relative to the price people want to buy.
Today's FY26 "pre-close" statement from Barratt Redrow illustrates his point.
**Barratt Redrow on selling houses**
>"Incentives moved higher from Oct-25 due to Budget-related uncertainty & have remained at broadly this higher level through FY26 ... we expect incentives to remain at their current level in FY27"
Also, 21% of private reservations are now under part-exchange.
**On buying land**
* FY25: approved 22.5k plots for purchase at 108 sites
* FY26: 3,029 plots, 27 sites\*
* FY27E: 6-8k plots\*\*
\* cancellation of 4k plots at 17 sites in H2 + "increasingly selective approach to land acq."; \*\* "fewer land opportunities expected to meet hurdle rate"
**On building houses**
>"Average build cost inflation for FY26 was \~2%, with \~1% cost inflation seen in HY26 and a higher rate of \~3% experienced in the second half of the year"
>"Overall build cost inflation in FY27 could be around \~3-4%", "slowdown across the wider industry"
**On completions**
* FY27 completions to be slightly above FY26
* FY26: 17,667 FY27E: 17,700-18,200
* (FY24: 17,972, FY25: 16,565)
**Discount to TNAV & returning capital**
Tangible NAV is 433.4p at 2025 year-end, "the Board has also concluded that 50% remains the correct proportion of adjusted net income to be returned to shareholders annually". and "the distribution of 50% of adjusted net income will be supplemented by an additional share buyback".
So they are returning £400m to shareholders, with £14m in dividends and £386m in buybacks, the latter notionally being 50% of the sum of FY26H2 and FY27H1E Adjusted Net Earnings.
Share price currently up 3.6% at 288.1p.
**But the whole thing still seems to be in the "too hard" category.**