‘Resilient’ Taylor Wimpey builds up land bank

Taylor Wimpey's estate at Hopefield, Bonnyrigg. Picture: Jim Bamford

Taylor Wimpey's estate at Hopefield, Bonnyrigg. Picture: Jim Bamford

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Housebuilder Taylor Wimpey will continue to strengthen its Scottish land bank after the group pointed to “resilient” trading in the wake of the Brexit vote.

Ryan Mangold, group finance director, said that both the firm’s east and west coast operations in Scotland were actively seeking new sites.

Speaking to The Scotsman as the group issued a trading update, Mangold said: “Demand remains strong. The Help to Buy scheme in Scotland is a bit different and it will be interesting to see how that evolves over the next two or three years.

“We continue to add to the land bank in Scotland, where both our east and west of Scotland operations are active in the market.”

He added: “Generally speaking, we are feeling pretty upbeat for the coming year.”

The finance boss described the Aberdeen market, where Taylor Wimpey has one of its 26 Scottish developments, as “a bit more challenging” amid the downturn in oil sector activity.

READ MORE: Construction crumbles to four-year low after Brexit vote

UK-wide, the FTSE 100 group sold 0.7 homes per sales outlet per week in the second half of this year, down slightly from 0.74 in the second half of 2015, while cancellation rates for the year to date edged up to 13 per cent from 11 per cent in 2015.

It said customer confidence was high, but parts of the central London had seen prices soften at the upper end of the market.

However, the firm warned that building costs were set to pick up by 3 per cent to 4 per cent this year, as the supply of skilled workers fails to keep pace with the demand for new homes.

Chief executive Pete Redfern stressed that the company had a strong order book throughout the rest of this year and into 2017.

He told investors: “Trading during the second half of 2016 and into the autumn selling season has been strong, with good levels of customer confidence and demand underpinned by a wide range of mortgage products.

“While there remains some uncertainty following the UK’s vote to leave the European Union, we are encouraged to see that the housing market has remained robust and trading has remained resilient.”

Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: “We don’t think much has changed in the housing market since the referendum, yet.

“Brits still want to own homes, whether in or out of the EU, and the UK still faces a major housing shortage. That should support demand for housing in the long run.

“At the moment interest rates look set to stay lower for longer; supporting mortgage affordability. If that continues to be the case the housebuilders should be able to deliver the hefty shareholder returns they have planned.”

Taylor Wimpey said its total order book was ahead of last year at £2.3 billion, compared with £2.1bn, to the week ending 1 November. Its net cash is set to come in at around £360 million for 2016, up from £223.3m to the end of December last year.

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