UPDATED: Taylor Wimpey reports ‘positive’ trading in Yorkshire

Taylor Wimpey has reported a positive trading performance in Yorkshire.
Taylor Wimpey has reported a positive trading performance in Yorkshire.
Have your say

Housebuilder Taylor Wimpey said it had enjoyed positive trading in Yorkshire, as the market was supported by healthy employment trends and a competitive mortgage market.

The company revealed that in the year to October 2017, total home completions in Yorkshire increased by 10.7 per cent to 1,506. The comparative figure for 2016 was 1,360.

Ryan Mangold, group finance director, said sales rates in Yorkshire are “pretty much in line” with the previous year or a fraction stronger.

He added: “We are not seeing any discernible shift away from people wanting to get on the housing ladder.”

Mr Mangold said housing was a “politically motivated” issue at a local level. He said Taylor Wimpey supported a national planning policy framework and it believes a balance of housing supply is needed to ensure there are homes for professionals such as teachers, firemen and policemen.

Taylor Wimpey currently has 43 outlets in Yorkshire and the total average selling price for the period to October 2017 in the region was £213,000.

In a trading update, the company said it was on track to hit annual targets as it shrugged off industry concerns over a market slowdown.

The FTSE 100 firm said the UK housing market was “positive” in the second half of 2017 and Central London was “stable”, but flagged that it was aware of potential political and economic risks.

The sales rate for the financial year to date was “strong” with net cash expected to reach £500 million for the end of the 2017 financial year.

However, order books dipped slightly at 8,751 homes and £2.2 billion, down from 8,981 and £2.3 billion over the same period last year.

It comes after shares in UK housebuilders came under pressure last week following recent gloomy reports from rivals and industry data pointing to slowing sales and prices.

Pete Redfern, chief executive of Taylor Wimpey, said the firm had “performed strongly” in the second half of 2017.

The Government’s Help to Buy Scheme and a robust market competition had underpinned demand, the firm said, with annual results expected to meet expectations.

Despite industry fears that this month’s interest rate rise from 0.25 per cent to 0.5 per cent - the first for a decade - could add to Brexit uncertainty to put off buyers, Mr Redfern said the group had continued to see “stability in trading patterns”.

“Looking ahead, we are on track to meet our full year expectations and deliver further growth and performance improvement in 2018,” he added.

The upbeat outlook comes despite a survey from the Royal Institution of Chartered Surveyors (RICS) last week showing house sale levels are flat or falling across large swathes of the UK.

The RICS report revealed homes are taking longer to sell, as well as a declining interest from buyers amid a shortage of new properties for sale, while asking prices for top-end homes are also coming under pressure.

Analysts from Numis said: “Taylor Wimpey’s trading update confirms that sales rates and outlet numbers are in line with expectations, which is reassuring given the updates last week cast some doubts on the strength of the new build sector.

“Overall, this is a reassuring statement with regard to both market conditions and outlet numbers.”

Trading at Taylor Wimpey has been strong in the second half and the group is on track to meet its full-year expectations, according to analysts at Jefferies.

The note from Jefferies added: “Taylor Wimpey’s trading statement is seasoned with several ‘s’ words: strong, stable, sustainable, but no mention of a slowdown, which leaves us keen to add some of our own: spreadsheets, slam-dunking, silverbacks. Share prices in the sector have been shaky since the silverback selling in September.

“In our view, it is time for the smart money to stock up on shares in the sector and we would single out the superior returns offered by the shares of Taylor Wimpey.”