In January, I toyed with adding housebuilder Barratt Redrow (LSE: BTRW) to my SIPP. I already held one housebuilder, in the shape of Taylor Wimpey, but thought it might be a good time to add another.

That’s not because my Taylor Wimpey shares had done well, quite the reverse. They’ve been horrible, as has the rest of their sector. Yet for a brief happy moment at the start of the year, it looked like things were about to turn.

Inflation was on the run, and the Bank of England was expected to cut base rates to as low as 3% across 2026. Mortgage rates would duly follow, putting money into buyers’ pockets. Activity, sales and prices would all rise. Everything was coming up roses. So how do things look today?

Is this a brilliant FTSE 100 bargain?

Not so good, I’m afraid. Everything changed on 28 February, with the conflict in Iran. That’s driven up the oil price, with Brent crude around $103 a barrel today (23 April). The price could a lot climb higher if the Strait of Hormuz squeeze continues.

Inflation was expected to be 2% by the spring. Yesterday, we learned it hit 3.3% in March, and that’s expected to climb too. Interest rates are likely to follow. Lenders have been pulling mortgage deals in anticipation, and repricing them higher. Resurgent inflation will also drive up building costs.

Over the last three months, Barratt Redrow is the single-worst-performing stock on the entire FTSE 100, down more than 30%. It’s down more than 40% over 12 months and 60%+ over five years. At today’s price of 266p, it’s at levels last seen in 2013.

Years of near-zero interest rates after the financial crisis had already stretched affordability to the max. Since then, we’ve had Brexit, the pandemic, the energy shock, cost-of-living crisis, inflation, rising employers’ National Insurance, the cladding fire safety scandal and the end of the Help to Buy scheme. It’s been a perfect storm for housebuilders, and it’s stormy again today.

Is that dividend to die for?

Yet on 15 April, Q3 results showed a pretty solid performance. Net private reservation rates rose 6% in the three months to 29 March. The board expects underlying pre-tax profits to rise 16% this year to £568m, in line with forecasts. It’s almost completed its £100m share buyback.

Barratt has a solid balance sheet, with £173m net cash position at last count, boosted by structuring the Redrow acquisition as a share offer. The trailing yield is a bumper 6.6%, although that’s forecast to slip to 5.4%. Recent dividend history has been bumpy, with cuts in 2023 and 2024, the latter by more than 50%.

The stock looks good value, with a forward price-to-earnings ratio of just 10.5. I think it’s worth considering with a long-term view, but investors must be patient. The UK economy could get worse before it gets better. Personally, I have enough exposure to this risky sector via Taylor Wimpey, and will be searching for bargains elsewhere.