UK housing market stable despite political uncertainty, says Taylor Wimpey
Housebuilding firm Taylor Wimpey said the housing market remained stable last year, despite ongoing economic and political uncertainty.
In a trading update this morning the company said that conditions were more challenging in London and the South East but demand for homes remained strong in the face of uncertainty caused by Brexit.
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The FTSE 100 firm said total home completions including joint ventures increased five per cent to 15,719, 23 per cent of which were affordable homes.
Taylor Wimpey’s net private reservation rate for the year was 0.96 homes per outlet per week and the cancellation rate was 15 per cent.
Average selling prices on private completions increased one per cent to £305,000, and the overall average selling price reached £269,000, up from £264,000 the previous year.
Taylor Wimpey chief executive Pete Redfern said: “Our results for the year to 31 December 2019 will be in line with our expectations.
“Despite an uncertain political and economic backdrop in 2019, we have continued to experience a good level of demand for our homes and trading in the second half of the year was as anticipated.
“The Group has again delivered a record sales rate and we increased home completions by five per cent in the year.
“In 2019, our focus was on strengthening the long term sustainability of the business, further improving our build quality and customer offering, as well as increasing operating capacity and flexibility.
“In 2020, we will continue with these initiatives and will also prioritise a renewed cost focus and process simplification improvements.”
Interactive Investor head of markets Richard Hunter said: “In 2020, the company’s performance will likely be second-half weighted, while there may be some headwinds developing as negotiations with Europe develop over the year. Further out, the removal of the Help to Buy scheme will undoubtedly punch a large hole in profits, and the sector as a whole will need to take action to replace that income.
For the moment, though, those are distant clouds on the horizon with the sector showing few signs of slowing down.
“Taylor Wimpey has ridden the wave, with the shares rising 29 per cent over the last year – and 23 per cent in the last three months alone – which compares to a hike of 11.1 per cent for the wider FTSE100. Against this backdrop, appetite for the stock remains undiminished, with the market consensus coming in at a strong buy.”