Sunday 22 July 2018

Taylor Wimpey cheers ‘solid’ housing market in spite of Brexit fears

Taylor, the UK’s third biggest housebuilder, said it saw “good demand and trading” throughout 2017 and expects further growth in the year ahead.

Taylor Wimpey said Britain's property market remains 'solid' despite wider economic uncertainty
Taylor Wimpey said Britain's property market remains 'solid' despite wider economic uncertainty

By Holly Williams, Press Association Deputy City Editor

Housebuilding giant Taylor Wimpey has said Britain’s property market remains “solid” despite wider economic uncertainty.

In a full-year trading update, the group reported a 5% rise in completions to 14,541 over 2017, while average prices on private sales lifted 3% to £296,000.

Taylor, the UK’s third biggest housebuilder, said it saw “good demand and trading” throughout 2017 and expects further growth in the year ahead.

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Chief executive Pete Redfern said the group expects further growth in 2018 after a strong 2017 (Taylor Wimpey/PA)

Its bullish remarks come in spite of mounting worries over a housing market slowdown after a run of recent downbeat reports.

The latest data from mortgage group Halifax showed the first monthly decline for six months in December as falling wages and Brexit fears weighed.

It said house prices fell 0.6% month-on-month in December, following a 0.3% increase in both October and November.

Pete Redfern, chief executive of Taylor, said: “Despite wider macroeconomic uncertainty, housing market fundamentals remain solid and our trading performance has been good.”

Taylor said last year saw demand for new homes helped by the Government’s ongoing Help To Buy scheme for first-time buyers, as well as low interest rates and mortgage availability.

“Employment trends continue to be healthy and customer confidence remains robust,” it added.

But shares in the group fell 3% as it disappointed investors hoping for a repeat of Persimmon’s profit upgrade on Tuesday, with Taylor saying 2017 profits would be in line with expectations.

Shares also slipped for rivals, with Persimmon, Barratt Developments and Berkeley Group all 2% lower in the FTSE 100.

Taylor said its order book fell to £1.63 billion as at the end of the year, representing 7,136 homes, down from £1.68 billion and 7,567 homes a year earlier.

But it said it had ramped up the pace of production to meet market demand in the year.

It saw a 3% to 4% rise in the cost of builds last year and expects a similar hike over 2018 amid “resourcing pressures” in the sector.

Taylor Wimpey was knocked in the first half of 2017 by a leasehold scandal that contributed to a 23% slump in half-year profits.

It set aside  £130 million to help customers trapped in onerous leasehold contracts drawn up by the house builder.

Leaseholders were forced to stomach ground rents that doubled every 10 years and the freeholds to their houses were able to be sold to third-party private firms, making many homes unsaleable.

In its latest update, the group said it had secured agreements with 90% of freeholders to allow affected customers to convert to an inflation-based leasehold scheme and was making “good progress”  on agreements with the remaining freeholders.

Analyst Robin Hardy at Shore Capital said Taylor Wimpey had reported a “slightly less buoyant update than we saw from Persimmon yesterday with guidance to trading set to be in line with expectations”.

Press Association

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