Taylor Wimpey reports strong demand for homes in second half
House building giant Taylor Wimpey reported strong demand for new homes in the second half of the year despite uncertainties related to Brexit.
The company said the UK housing market remained resilient in the second half, but said customer caution increased in the higher-priced markets of London and the South East.
Read more: Taylor Wimpey profits drop due to higher costs
Taylor Wimpey’s order book stands at 10,433 homes as at 10 November, an increase of 12.5 per cent.
The developer has previously warned that building costs have increased, but this morning said cost pressures seen earlier in the year had begun to ease.
Taylor Wimpey – the third biggest housebuilder in the UK – said it was on track to meet full-year expectations, but warned margins would be lower than previously forecast.
It expects to end the year with a net cash balance of around £500m, compared to £644.1m at the end of December last year.
“The key takeaway from Taylor Wimpey’s latest trading update is that the housebuilder says build cost inflation is starting to soften and that this trend will continue in the coming months,” Russ Mould, investment director at AJ Bell, said.
“This is significant as the combination of rising costs and stalling house prices have been putting pressure on the profitability of the wider industry and led the market to question its shaky foundations.
“The disappointment is that these cost pressures are not yet easing rapidly enough for Taylor Wimpey to maintain its previous margin guidance, even if overall guidance is maintained.”
Read more: House building props up otherwise struggling construction industry
Taylor Wimpey chief executive Pete Redfern said: “In spite of wider political and economic uncertainty, housing market conditions have remained resilient. We are focused on the delivery of the highest service and build quality to our customers and investing in the sustainability and future capacity of our business.”