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Taylor Wimpey’s record-breaking H2 results built on ‘affordable mortgage market’

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  • 31/07/2013
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Taylor Wimpey’s record-breaking H2 results built on ‘affordable mortgage market’
Home builder Taylor Wimpey has broken pre-order records in H2, which it attributes to better mortgage availability, the direct impact of government schemes and an improving economy.

The firm said it is almost 90% forward-sold for 2013 and expects the market to deliver results for the year at the “upper end of expectations.”

The builder reports a record order book of £1.3bn at 1 July 2012, worth £960.1m up 35% in value and 24% in volume to 7,101 homes against 2012 figures.

In the first six months of the year, Wimpey finished building 5,191 homes at an average selling price of £188,000, against 5,083 homes at £176,000 in H1.

Pete Redfern, Taylor Wimpey chief executive, said: “During the first half of 2013, there has been meaningful improvement in the housing market, with more positive consumer sentiment, a more available and affordable mortgage market, and the presence of Government mortgage schemes, all adding to a favourable outlook.

Our business is ideally positioned to perform well in this environment with a strong land position and a very effective house building operation. We continue to open all new outlets with implementable planning permission.”

The firm said since the launch of Help to Buy in April 2013, it has continued to drive increased visitors and increased sales rates in an already confident market.

“This will naturally accelerate the delivery of our key strategic objectives. To date customers have reserved c. 1,300 homes using the scheme with a further c. 250 going through the qualification process with the Home Buy agents.

“Looking forward to 2015 and beyond, we believe that the structural undersupply of UK homes will be only partly mitigated by the slightly improved planning system which, coupled with the high level of underlying demand for our homes, will contribute to a positive trading environment.”

However, the firm identifies Basel III and other higher capital requirements as a potential destabilising risk to the mortgage market alongside government changes to regulation and planning policy, which are slowing the planning process.

Jeremy Duncombe, director at Legal & General Mortgage Club, said: “Although the government’s New Build initiatives have really helped the sector, the most important thing that has returned is confidence. We still have a significant shortfall in housing stock, so now is the time to build on that confidence and encourage even more new homes to be constructed.

“Significant banks of land are available across the country, owned by builders and awaiting development. Many urban centres also have disused commercial buildings that are ripe for development. It’s vital that the government, builders, lenders and brokers all work together in order to bring these into residential use as soon as possible to help satisfy a growing demand.”

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