Taylor Wimpey dispels housing gloom

● Scottish home completions climb 5% as company stays upbeat

Taylor Wimpey, which has 25 sites in Scotland, provided some cheer for the housing market yesterday by saying demand remained strong across the UK.

The group, which has worked on the Dunfermline Eastern Expansion Project, said stable market conditions were helped by “robust” customer demand, good employment trends, a “competitive mortgage market” and the government’s Help to Buy scheme.

Peter Redfern, chief executive of Taylor Wimpey, said: “Taylor Wimpey has performed strongly during the second half of 2017, delivering excellent sales rates and making further good progress against our operational targets.

“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 firm’s upbeat outlook follows a survey last week from the Royal Institution of Chartered Surveyors showing house sale levels were flat or well positioned to deliver sustainable growth”.

The company’s Scottish sites are pretty evenly balanced between the east and west, and in the period to October total home completions in Scotland climbed 5 per cent to 882 from 838 in the same period of 2016.

The average selling price in Scotland was £217,000: £215,000 in the east of the country and £218,000 in the west.

Leith Khalaf, an analyst with Hargreaves Lansdown, commented: “Taylor Wimpey’s third-quarter trading update paints a picture of stable conditions in the UK housebuilding sector.”

He added: “The interest rate rise from the Bank of England clearly raises a few eyebrows when it comes to the housebuilding sector, which of course relies on mortgages to support customer activity.

“However, the rate rise was modest, and borrowing money to buy a house is still incredibly cheap by historical standards, and looks set to remain so for some time to come.”

Taylor Wimpey said UK sales rates for the year to date have continued to be strong at 0.81 sales per outlet per week (2016: 0.75). The housebuilder added that its total order book, excluding joint ventures, of 8,751 homes was slightly below last year’s 8,981, and stands at £2.2 billion. That is just down on £2.3bn at this time last year.

Build costs are expected to increase 3-4 per cent this year, the company noted, citing the greatest pressure coming from labour costs and a more modest level of cost inflation in building materials.

The group, formed from the merger of Taylor Woodrow and George Wimpey in 2007, said: “The land market remains very attractive and we continued to acquire land on compelling financial metrics.”

STRONG DEMAND “Taylor Wimpey’s third-quarter trading update paints a picture of stable conditions in the UK housebuilding sector.”

LEITH KHALAF