Taylor Wimpey: Higher demand buoys sales as firm preps for planning reform
After a tough start to the year, Taylor Wimpey has reported signs of improving customer demand as mortgage rates fall and affordability pressures ease.
The housebuilder said it remained on track to deliver UK volumes in line with previous guidance of 9,500 to 10,000 homes and operating profit consistent with current market expectations.
In the second half to date, its sales rate – the average number of homes a developer sells per week – was 0.70 homes per week, up from 0.51 in 2023. (2023: 0.51) with a cancellation rate of 17 per cent, down from 21 per cent last year.
For the first nine months of the years, its sales rate was 0.73, from 0.63 in 2023, with a cancellation rate of 15 per cent from 18 per cent in 2023.
Demand for houses in the UK has been rising since the Bank of England first cut the base interest in July, which subsequently lowered mortgage costs.
As of the start of November, Taylor Wimpey’s total order book was £2.2bn, up from £1.9bn in 2023. It represented 7,716 homes, up from 7,042 in 2023.
Taylor Wimpey buys up land ahead of planning reform
The company reiterated its support of the Government’s plan to address the UK’s housing shortage and said it remained “confident in the fundamentals of the market”.
It has been active in the land market, approving 11,000 plots in the period, with a strategic land pipeline stood of 136,000 potential plots.
The company said it has “excellent visibility” of its land pipeline to “deliver growth from 2025, assuming a supportive market”.
“We continue to leverage our strategic land position with proactive applications in the system and additional applications prepared if we see the proposed National Planning Policy Framework changes adopted in the coming months,” it said.
‘Well positioned for growth’
Chief executive Jennie Daly said the company was in a strong position heading into 2025.
“We’re pleased with the progress and performance of our business in the second half to date. Our teams have continued to work extremely hard on the ground, supporting customers through their buying journey and delivering an improved sales rate – thanks to the quality of our sites and locations, and our focus on operational excellence.
“Underpinned by a strong balance sheet, well-located landbank and highly experienced teams, we are well positioned for growth from 2025, assuming supportive market conditions,” Daly said.
Anthony Codling, housing analyst at RBC capital markets, said: “Taylor Wimpey is performing well in a challenging market… operationally Taylor Wimpey is lean and agile, unlike some of its peers there was no change in guidance because of recent moves in National Insurance or build costs.
“Looking ahead Taylor Wimpey will enter 2025 with a strong orderbook and with its skills and tenacity in the strategic land market it is well-placed to take advantage of Labour’s reform of the planning system.
“The recent falls in the share price seem to us at odds with the underlying performance and positioning of the Group.”