Redrow and Berkeley follow suit with site closures as government ‘freezes’ housing market

Berkeley, however, has become the first house builder to say it will still pay dividends to shareholders, although its annual profits are expected to fall by around £80m.

Both builders said they have opted to close the sites because of challenges with the supply chain.

Redrow told the markets earlier this week that it was keeping sites open in line with government guidance, before a number of volume builders and the social housing sector’s biggest developer – L&Q – announced site closures.

Redrow posted an updated statement to the financial markets today, confirming that it had already closed sales offices and reduced its workforce on sites to target construction operations on plots that are due to complete over the coming weeks.

“However, it has become increasingly impracticable as our supply chain has been significantly impacted in recent days. As a result the board has now decided to go further and commence with immediate effect an orderly and safe closure of all of our sites and offices.

“When there is a return to normality in the supply chain, and we are satisfied it is safe for our workforce to return to work, we will reopen sites and recommence production with an initial focus on fulfilling our substantial order book that stands at £1.4bn of which £0.9bn is contracted.”

Redrow said it has started discussions with its syndicate of six banks about extending its £250m revolving credit facility, with an additional ‘accordion’ facility of up to £100m.

It also submitted an application to the Bank of England for eligibility for the government’s COVID-19 Corporate Financing Facility.

John Tutte, chair of Redrow, said: “These are unprecedented times. The actions we have announced today will give us the flexibility to manage the business through this turbulent period to ensure we are ready to resume production when it is safe to do so.”