TAYLOR Wimpey boss Pete Redfern said yesterday that the Scottish new homes market is starting to catch up with booming London as the company reported a further jump in sales thanks to the government Help to Buy schemes.
Redfern told The Scotsman that in the past few weeks there were signs that growth in the London area was slowing, while other regions, including Scotland, had gathered pace.
“We’ve seen growth in terms of both sales and price in every single market we operate in, without exception,” he said.
Last year, and in early 2014, London and the south-east of England were clearly leading the way.
“But if you look at the last three months, the growth has often been slightly stronger in other regions, as growth in London has slowed slightly and other regions have gathered pace,” he added. “The growth of sales rates in Scotland has been more than double that of the business as a whole. That’s partly because you’ve seen that growth later in Scotland. Price growth has also picked up a bit.”
Redfern said a summer slowdown was inevitable, especially north of the Border where the independence referendum creates an element of uncertainty. He expects buyers will continue to visit sites but will be cautious about sealing a deal.
“Hopefully, that will just be eight to ten weeks of slower period rather than longer,” he said. “And statistically we haven’t seen it yet.”
In an update before its half-year results, Taylor Wimpey said UK-wide sales were up 11 per cent in the first six months of 2014, while the average selling price was 9 per cent higher at £224,000.
It said the price rise was due to its “continued weighting towards better-quality locations and the benefit of the wider housing market improvement”.
The company built 5,766 homes in the first half of the year and said operating margins are on track to improve from 13.1 per cent a year ago to about 16 per cent.
The Help to Buy scheme accounted for 42 per cent of the homes sold by Taylor Wimpey to private buyers during the first six months of this year.
The housebuilder said the initiative – which gives a loan of 20 per cent to buyers with a small deposit – remains “very popular” with customers, mainly first-time buyers, at an average selling price of about £207,000.
Shares in housebuilders staged a relief rally recently when the Bank of England imposed what were seen as mild measures to rein in the housing market.
Redfern said he too was encouraged by the steps, “not because they are mild, but because they signal a desire to manage things in the longer-term rather than a reactionary desire just to manage what’s on front of you”.
He said he was not averse to further action from the Bank, including a first rise in interest rates.
“It’s quite possible they will tighten things further, but that in itself is OK,” he said. “I would rather see early small interest rate rises that a prolonged period where people are waiting for that to happen.”
Taylor Wimpey is scheduled to post its first-half results on 30 July.