Barratt Redrow said a higher tax burden and increased regulation was 'constraining' the sector as it trimmed its housebuilding target for the year. 

Britain's biggest housebuilder said Labour's planning reforms aimed at delivering 1.5million homes 'will not be enough', reiterating its calls for more support for first-time buyers. 

It came as Barratt, which built 17,667 new homes in the year to June 2026, flagged 'continuing planning delays', which Labour promised to tackle as part of its package of reforms. 

The housebuilder now expects to complete 17,500 to 17,900 homes this year, down from its previous forecast of between 17,700 to 18,200. 

It expects higher mortgage rates and affordability pressures to continue to affect consumer confidence over the next year. 

The housing market is facing subdued demand as mortgage lenders raise rates amid the war in the Middle East, in addition to rising building costs, which Barratt expects to increase by 4 per cent over the next year. 

As more housebuilders scale back development, Labour will find it increasingly difficult to meet its target.   

Barratt said: 'It is only by reducing barriers to home ownership and addressing the increasing regulatory and tax burdens that are constraining housebuilding viability across many parts of the country, that the Government will be able to unlock increased levels of housing delivery, including affordable housing, to start to tackle the housing crisis, create jobs and drive economic growth across the country.' 

Earlier this year, Barratt and Rightmove together urged Labour to abolish stamp duty for first-time buyers, with rivals Berkeley and Bellway since joining their calls. 

Barratt's share price has fallen by more than 18 per cent in the past year. But on Wednesday morning the shares rose 7.53 per cent or 20.80p to 297.20p after it confirmed a £386 million share buyback programme, first flagged in July. 

The firm reported a 7.1 per cent fall in annual adjusted pre-tax profit to £600million, while revenue rose 6.6 per cent to £6.1billion. 

It was driven by new home completions and a smaller contribution from higher average selling prices as the mix shifted towards larger homes in more expensive locations. 

The group said: 'A more positive start to 2026, with Budget uncertainties removed and interest rate cuts back on the agenda, was sharply reversed by the start of the Middle East conflict at the end of February. 

'These events, and the corresponding risks around energy costs, disruption to supply chains and inflation, saw a significant shift in interest rate expectations, making homebuyers more cautious and increasing ongoing affordability challenges in the UK housing market.'

The company has been cutting its land spending and approval targets, anticipating higher costs from rising energy prices linked to war in the Middle East.

Aarin Chiekrie, an equity analyst at Hargreaves Lansdown, said: 'Looking ahead, the near-term picture remains challenging with continued planning delays, build cost inflation set to rise towards 4 per cent, and UK house prices trending lower. 

'Due to the softening market, buyer incentives are set to remain elevated, and the 2027 completions outlook has been wound back a touch, with the midpoint of guidance now expected to be broadly in line with last year’s level. 

'Barratt has a strong balance sheet though, which should help the group weather the current storm.'

Richard Hunter, head of markets at Interactive Investor, said: 'The market consensus of the shares as a strong buy and an appreciative opening reaction to the numbers suggests that investors are standing by the group despite its challenges.'

This week one of Britain's biggest construction companies said it would not invest any more money into property development projects in a fresh blow to Labour's housebuilding target. 

Kier Group said it planned to halt investment into property development from next year, and shift funds to its core construction and infrastructure operations. 

The property arm, which largely works through joint ventures with other firms, invests and develops both commercial and residential urban regeneration schemes across the UK.