Housebuilders Barratt and Redrow look to raise £876m

Both Barratt Developments and Redrow have announced they will raise cash through substantial rights issues.

Barratt said it was to raise £720m to reduce its debt and make money available for developing existing sites and acquiring new land.

Meanwhile, Redrow announced a £156m rights issue to cut its debt and fund further acquisitions.

Chairman Steve Morgan said: "The proposed rights issue will strengthen Redrow's balance sheet and position Redrow for growth. We now need to enhance our ability to acquire land through selected acquisitions."

Barratt's rights issues was announced at the same time as its annual results. It reported a £679m pre tax loss for the year to June 30, compared to a £137m profit last year. Operating profit before exceptional items was £34.2m.

Group chief executive Mark Clare said it had been an "intensely difficult year following the shard decline in the housing market".

He added: "In the first half, as prices fell, we drove sales and reduced stock and debt levels. In the second half we have been able to maintain price levels and increase our reservation rates, with these encouraging trends continuing through the summer into the autumn.

"The group has therefore decided it is now an appropriate time to substantially strengthen the company's balance sheet and reduce its debt levels via a placing and rights issue."