Economy

Taylor Wimpey reports 'strong' sales as housing demand 'remains high'

Taylor Wimpey reports 'strong' sales as housing demand 'remains high'”

In the year to date the sales rate was 0.81, up from 0.75 last year, but over the last eight weeks the rates rate has been flat at 0.73.

It did, however, reiterate that build costs are expected to increase slightly - by around 3 to 4 per cent - this year, with the pressure coming from labour costs and a modest level of cost inflation in building materials.

Despite industry fears that this month's interest rate rise from 0.25 per cent to 0.5 per cent - 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".

Two of its rivals, Persimmon and Redrow, spooked the market last week and sent shares sliding after trading updates that seemed to suggest some reduction in sales volumes. The company also said it was fully sold up for the year.

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

Taylor Wimpey has added 13,700 plots to its short term landbank in the year to the end of October.

Taylor Wimpey said the Spanish housing market remains strong, with the order book in the country standing at 388 homes as of November 5, compared to 342 the same day past year. It expects the Spanish business to report growth in operating profit, having posted a figure of GBP20.6 million for 2016.

The company has reached agreements with freeholders to allow customers with 10-year doubling leases to convert to a structure that includes price increases in line with the retail price index (RPI).

"We continue to make good progress towards securing agreements with other freeholders to also enable the conversion of the remaining doubling ground rent leases", it said in a statement said.

The housebuilder said it expects to deliver full-year results in line with expectations and to deliver more growth next year. It said it expected net cash to hit £500m by the end of this year, up from £365m at the end of last year.

The FTSE 100 firm said the United Kingdom 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.

However, it believes it is well placed to manage any changes in market conditions with a "robust" balance sheet, a high quality landbank and a "strong" order book.

The update came soon after property website Rightmove said the average asking price for a house in the United Kingdom was down 0.8% on month in November, following the 1.1% increase in October.

Taylor Wimpey shares were ahead by 1¾p at 194½p in mid-morning trading.



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