Bouyant housing market sees profit rise by 34% at UK’s third largest house-builder
Profit at Taylor Wimpey soared by 34% in 2015 due to surge in demand in the aftermath of the election and demand outstripping supply, the housebuilder has confirmed.
Pre-tax profit before exceptional items at the UK’s third biggest house-builder rose 34.1% from £450m to £603m to the year ending December 2015. Revenue grew 16.9% from £2.68bn to £3.14bn over the same period. The housebuilder also stated that average house prices rose by approximately 6% in 2015, led by market conditions.
Taloy Wimpey’s annual report stated: “Following the outcome of the General Election, there was a more significant improvement in consumer confidence, and mortgage availability and cost, which continued into the traditionally slower summer period.”
The soaring profits from Wimpey come as the bouyant housing market saw demand outstrip supply, with average sale prices rising 8% to £230,000 from £213,000 in 2014.
Taylor Wimpey also announced a record year end order book of 7,484 homes, up from 6,601 in 2014 representing a value of £1.7bn. Profit margins at the house-builder rose 2.4% from 17.9% to 20.3%.
However despite the rise in profit the house-builder warned that uncertainly over areas of the new Housing Bill - including Starter Homes - could have a disruptive effect on the market.
The annual report stated: “The position is dynamic as a number of elements, particularly around the Starter Homes initiative, are still to be fully defined which, as they are clarified and embedded, could have a disruptive effect on the planning system, sales rates, site mixes and customer behaviour.”
Wimpey warned that a rise in house-building production could have an inflationary effect on build-cost prices, with the firm expecting a 3 - 4% rise in 2016 on top of the 5% rise last year.
Commenting on the results Taylor Wimpey chief executive Pete Redfern said: “Taylor Wimpey delivered a record performance in 2015, building over 13,000 homes across the UK and contributing over £335 million to local communities. We are focused on creating long term value and are supportive of policy initiatives that promote sustainability and reduce volatility in the housing market.
2016 has continued to be positive across all of our regional markets, with demand strong and good access to mortgages. With a strong order book and high-quality landbank, we continue to work with stakeholders to ensure we open all sites with implementable planning and begin building as quickly and efficiently as possible.”