Building chief hails Labour ‘ambitions’
TAYLOR WIMPEY today backed the government’s push to build 1.5 million homes in the next five years as the FTSE 100 developer revealed a sharp drop in profits.
But the £6 billion firm stood by its own plans to complete up to 10,000 properties this year.
Its chief executive, Jennie Daly, called Labour’s plans for homes — as outlined by Angela Rayner in the House of Commons this week — “ambitious” and “much needed”, adding: “It is very pleasing to hear the deputy prime minister recognising, alongside the chancellor, that planning has been a major barrier to economic growth, and having a series of measures … I think it levels the playing field. This is an excellent start.”
Taylor’s half-year profit fell by over 58% to £187.7 million from revenue of £1.517 billion. The slump came as the company upped provisions for the cost of works to remove cladding from buildings, to improve fire safety.
Today it set aside a further £88 million, increased largely due to the impact of inflation on the cost of the works, which are being carried out across the industry after the Grenfell Tower disaster. The size of the team employed on the enhancements has also been increased.
With the Bank of England expected to start cutting interest rates this summer, from 5.25%, reducing the cost of mortgages, next year is shaping up as an important one for house builders.
Daly said that enquiry levels have been “surprisingly strong” even with the base cost of borrowing at its 16-year peak.
“What’s really challenging our customers, particularly first-time buyers, is affordability at the current interest rates,” she said.
The outlook for rate cuts in the second half of 2024 is expected to release pent-up demand in the industry.
“We’ve done all we can to set 2025 up well,” Daly said. “I’m really pleased with our visibility around outlets. It really is now all about the market.”
Taylor’s shares added over 2p to 161p this morning.