Barratt Redrow PLC and Persimmon Announce 5 % Mortgage Deposit Scheme

Barratt Redrow PLC (LSE: BD) announced on 13 October 2025 that it will launch a 5 % mortgage deposit scheme in partnership with house‑building rival Persimmon. The scheme is aimed at first‑time buyers and those who are unable to provide a full deposit for a new home. Under the arrangement, a lender will finance 5 % of the purchase price, reducing the amount that the buyer must raise from savings or other sources.

Impact on Share Price

The announcement came at a time when Barratt’s share price had recently traded near its 52‑week low of £347.60 and was close to the mid‑point of its recent trading range. Following the news, Barratt shares rose modestly in early London trading, closing at £384.20 on 12 October 2025. This represents an increase of roughly 10 % from the 52‑week low and places the stock near the lower end of its recent 52‑week high of £507.40. The market capitalization remains at £5.37 billion, with a price‑earnings ratio of 28.90.

Context within the FTSE 100

The FTSE 100 index was trading in a marginal loss zone at the start of the day, opening at 9 407.52 points, a 0.37 % decline from its previous close of 9 442.94 points. The index subsequently settled around 9 442.87 points, showing only a 0.16 % gain for the day. The broader index movement reflects a cautious market environment, with precious‑metal miners and banks providing a defensive lift but overall sentiment remaining subdued.

Strategic Rationale

Barratt’s management has highlighted that the deposit scheme will expand access to its portfolio of new homes, particularly in the affordable and mid‑price segments. By aligning with Persimmon, the company can leverage the latter’s distribution network and financial expertise to accelerate customer acquisition. The scheme is also expected to increase demand for Barratt’s developments, potentially improving sales velocity and revenue in the coming quarters.

Investor Perspective

Analysts note that the deposit scheme aligns with a broader trend of developers partnering with financial institutions to mitigate affordability barriers. Given Barratt’s established market position and strong pipeline of projects, the initiative is viewed as a positive catalyst for future growth. However, the impact on earnings will depend on the uptake of the scheme and the cost of capital associated with the financing arrangement.

Conclusion

Barratt Redrow PLC’s partnership with Persimmon to launch a 5 % mortgage deposit scheme represents a strategic move to broaden customer access to new homes. While the share price has shown a modest lift in the wake of the announcement, the overall market context remains cautious. Investors will monitor the scheme’s uptake and its influence on Barratt’s sales performance over the next financial period.