Sunday 22 September 2019

Taylor Wimpey upbeat on high demand for new housing

The FTSE 100 firm said the UK housing market was “positive” in the second half of 2017.

Taylor Wimpey
Taylor Wimpey

By Ben Woods, Press Association Chief City Correspondent

Housebuilder Taylor Wimpey has cheered a high demand for new housing and said it was on track to hit annual targets as it shrugged off industry concerns over a market slowdown.

The FTSE 100 firm said the UK housing market was “positive” in the second half of 2017 and Central London was “stable”, but flagged that it was aware of potential political and economic risks.

The sales rate for the financial year to date was “strong” at 0.81, with net cash expected to reach £500 million for the end of the 2017 financial year.

However, order books dipped slightly at 8,751 homes and £2.2 billion, down from 8,981 and £2.3 billion over the same period last year.

It comes after shares in UK housebuilders came under pressure last week following recent gloomy reports from rivals and industry data pointing to slowing sales and prices.

Pete Redfern, chief executive of Taylor Wimpey, said the firm had “performed strongly” in the second half of 2017.

He said: “While we are alert to potential political and economic risks, demand for new housing remains high across the UK and market conditions are favourable.”

The Government’s Help to Buy Scheme and a robust market competition had underpinned demand, the firm said, with annual results expected to meet expectations.

Despite industry fears that this month’s interest rate rise from 0.25% to 0.5% – the first for a decade – could add to Brexit uncertainty to put off buyers, Mr Redfern said the group had continued to see “stability in trading patterns”.

“Looking ahead, we are on track to meet our full year expectations and deliver further growth and performance improvement in 2018,” he added.

The upbeat outlook comes despite a survey from the Royal Institution of Chartered Surveyors (RICS) last week showing house sale levels are flat or falling across large swathes of the UK.

The RICS report revealed homes are taking longer to sell, as well as a declining interest from buyers amid a shortage of new properties for sale, while asking prices for top-end homes are also coming under pressure.

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