Taylor Wimpey bullish on UK housing market

Taylor Wimpey says the UK housing market continues to flourish this year, brushing aside fears it has stalled ahead of the general election.

Britain's second-biggest housebuilder by volume posted an average private net reservation rate of 0.76 sales per outlet per week for the year to date, up from 0.74 last year. Cancellation rates rose marginally to 11 per cent from 10 per cent.

Taylor Wimpey attributed growth in the first four months of 2015 to increasingly competitive mortgages and secure employment prospects underpinning British homebuyers' confidence, despite evidence of a slowdown in the run-up to May 7.

"The uncertainty surrounding the general election outcome has not impacted customer confidence, and underlying demand remains high," said Pete Redfern, chief executive, ahead of the FTSE 100 group's annual meeting on Thursday.

"We have had a strong first quarter in a positive trading environment."

Taylor Wimpey's total order book stands at 8,200 homes - an increase of 24 per cent from the year-end. The value of the order book has climbed 12 per cent from the equivalent point last year to £1.9bn, while the average selling prices of homes in the private order book has risen 14 per cent from the same time last year to £283,000.

UK developers face harsh criticism as the country faces an acute housing crisis, with the national shortage of homes thrown into the spotlight last week after Conservatives led the launch of their election manifesto with a pledge to boost "Right to Buy" home ownership.

Taylor Wimpey, Barratt Developments and Persimmon, the three largest listed housebuilders, together built 40,801 homes during 2014, just a quarter of output, with small, privately owned housebuilders producing much of the rest.

"We remain focused on progressing our sites through the planning system to enable us to start on site as soon as possible and remain on track to deliver good progress towards all of our medium-term targets in 2015," said Mr Redfern.

Analysts at Jefferies said: "Taylor Wimpey has seen a strong first quarter and so far the election has not led to a reduction in demand. With Help to Buy running very smoothly and cross party political consensus that we need more houses, the electorate are currently voting with their feet and buying houses."

Taylor Wimpey's short term land bank stood at around 78,000 at end March with its strategic land pipeline at 109,000 potential plots.

It plans to pay a full year dividend for 2014 of 1.56p per share, compared with 0.69p in 2013, and a special cash dividend of 7.68p. Its shares were down 0.5 per cent at 163.5p in early Thursday trading.

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