Main Menu

Builder says confidence is strong

Taylor Wimpey upbeat on housing outlook

housebuildingTaylor Wimpey says the housing market remains in good shape in spite of concerns over the Brexit decision.

In a broadly positive statement, the house-builder reported strong trading during the second half of 2016 and into the autumn selling season.

It said there were good levels of customer confidence and demand underpinned by a wide range of mortgage products.

“While there remains some uncertainty following the UK’s vote to leave the European Union, we are encouraged to see that the housing market has remained robust and trading has remained resilient.

“We have a strong order book position for 2016 and going into 2017, and we will maintain our focus on delivering our medium term targets.

“Looking ahead, we continue to implement our disciplined strategy which ensures that we are well placed to perform well through all market conditions and deliver enhanced value through the cycle.”

UK current trading

The UK housing market has remained positive in the second half of 2016, with a high level of customer confidence. Customers benefit from a competitive mortgage environment, with a wide choice of mortgage products available across a range of loan to value ratios.

As previously guided it says the central London market has slowed during 2016 and prices have softened slightly at the upper end during the second half of the year. However, it says there remain high levels of demand in this market.

The company is fully sold for its targeted 2016 completions and are building our order book for 2017 and beyond.

Build costs

As previously guided, build costs are expected to increase by c.3-4% during 2016 with the majority of cost pressures coming from labour where skilled resource availability has improved but not at the same pace as the increase in new home supply.

“Whilst we expect to see some impact on input prices from the moving exchange rate, we do not expect this to be significant due to the low level of direct imports.

“We expect underlying build cost increases during 2017 to be at a similar level to 2016.”

Land and planning

“The land market remains positive. Whilst still exercising an appropriate degree of caution, following the EU Referendum and the associated economic uncertainty, we have continued to progress attractive land deals.”

In the year to 30 October 2016, the company has added c.11,500 plots to the short term landbank at similar financial returns to previous years.  

Outlook

“Whilst the implications following the EU Referendum are still unclear, the UK housing market has remained resilient, with long term fundamentals underpinned by strong demand.

“Looking ahead, we remain confident that our business model and strategy focused on managing the business through the cycle positions us to perform well through all market conditions.

“We continue to focus on delivering our enhanced medium term financial and quality objectives, embedding our customer service processes and driving improvement in operational discipline.

“We expect to deliver an improvement in operating profit margin in 2016 (FY 2015: 20.3%), as previously guided, and a return on net operating assets of around 30%. We remain committed to the announced £450 million total dividend payment to shareholders in 2017.”

Chief executive Pete Redfern, Chief Executive, said: “Trading during the second half of 2016 and into the autumn selling season has been strong, with good levels of customer confidence and demand underpinned by a wide range of mortgage products.

“While there remains some uncertainty following the UK’s vote to leave the European Union, we are encouraged to see that the housing market has remained robust and trading has remained resilient.

“We have a strong order book position for 2016 and going into 2017, and we will maintain our focus on delivering our medium term targets.”

Share The News Tweet about this on TwitterShare on FacebookShare on Google+Email this to someoneShare on LinkedIn





Leave a Reply

Your email address will not be published. Required fields are marked as *

*