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Interest rate rise has not hurt buyer demand ‒ Taylor Wimpey

  • 26/04/2022
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Interest rate rise has not hurt buyer demand ‒ Taylor Wimpey
The increase in bank base rate has made little difference to demand from homebuyers, Taylor Wimpey has argued.

In a trading statement, the housebuilder noted that demand from buyers remains strong, with the recent increase in interest rates from the Bank of England failing to impact customer appetite.

In addition it noted “the mortgage market remains competitive, with good availability of low-cost fixed rate mortgage products”.

Taylor Wimpey confirmed that its current total order book value stands at around £2.97bn, compared to £2.8bn in the same period last year. This represents just shy of 11,000 homes, which is on a par with the figure from last year.

The builder noted that it will pay an extra £80m for the removal of cladding from high rise buildings, which brings the total it has so far provided to around £245m. It emphasised its belief that this remains “an industry-wide issue involving many types of organisations, and therefore needs an industry-wide solution”.

Taylor Wimpey noted that inflation is pushing up the cost of delivering homes, with build cost inflation currently running at around six per cent. However, it suggested that this is being more than offset by the rate of house price growth.

The housebuilder confirmed that it now has around 87,000 plots in its short-term landbank, an increase from 82,000 in the same period last year. The value of the land on its balance sheet has also increased markedly over the period, from £2.9bn to £3.4bn. 

Jennie Daly, the designate chief executive for Taylor Wimpey, said: “Trading has continued to be strong, supported by a healthy market backdrop. We have also continued to make good progress against our strategic priorities, including driving growth in operating profit margin and outlet openings. Demand for our homes remains strong, with the business well positioned to deliver further progress in 2022 and beyond.”

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