Housebuilder Redrow has said it will scale back its operations in London as it warned over profits in the wake of the coronavirus pandemic.
The company said it will drastically pull back in the capital to focus on higher-margin regional areas as buyers look for more green space.
It said that recent studies have highlighted that homebuyers have a strong desire for “more inside and outside space” in light of the pandemic, creating stronger opportunities for its regional and heritage operations.
Redrow warned that the shift in strategy and the impact of coronavirus means its profits for 2020 will be “substantially below 2019”.
It told investors on Tuesday that site closures at the end of March had a “profound impact” on its trading for the year to June.
The Group said it completed 4,032 homes in the year to the end of June compared to 6,443 in the previous year.
Meanwhile, it said it expects to have posted £1.34 billion in turnover for the year, slumping from £2.11 billion in the previous 12-month period.
Redrow said it has witnessed “strong pent-up demand” in the five weeks since it has reopened its sales offices, especially from buyers using the Government’s Help to Buy scheme.
It also stressed that it has a record order book of £1.42 billion, as a result of a strong sales performance earlier in the year and a “significant shortfall in legal completions” due to the virus.
John Tutte, executive chairman of Redrow, said: “This has been a challenging period for the industry and prevented the group from delivering another set of record results.
“The business has however demonstrated its resilience throughout the crisis and I am immensely grateful for the dedication of my colleagues, the commitment of our wider workforce and the continuing patience of our customers as we adjust to a new way of working.
“Whilst these extraordinary times have been testing for the business, they have provided us with an opportunity to focus on our core strengths putting product, customer satisfaction and the environment at the heart of a recovery strategy to maximise shareholder returns.”