UK’s Taylor Wimpey upbeat on 2024 house building target despite tough first half
UK’s Taylor Wimpey said on Wednesday (Jul 31) it expects to build close to the upper end of its annual house target despite posting a slump in half-year profits, reflecting market expectations of a demand recovery as mortgage rates ease.
Shares in the FTSE 100-listed housebuilder, which have risen about 8 per cent so far in 2024, gained 2.3 per cent in early trading, hitting their highest level since January 2022.
The British housing market has been betting on a near-term recovery on easing mortgage rates amid cut-throat competition among lenders and potential interest rate cuts in a sector that has seen subdued demand for most of 2024.
Many of the top UK lenders have lowered mortgage rates this month following cuts in early 2024, although a delay in the Bank of England’s monetary policy loosening has averted continual reductions in home loan rates through the year.
Taylor Wimpey said it now expects to build close to the upper end of its target range of 9,500 to 10,000 homes in 2024 in the United Kingdom.
Elevated mortgage costs continued to impact affordability for some of its customers, particularly first-time buyers, it said, but added that it saw good interest and stable booking levels during the seasonally quieter summer holiday period.
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It said the elevated borrowing costs and regulatory pressures were also negatively impacting the ability of housing associations to commit to affordable housing deals.
The company said pre-tax profit fell 58 per cent to £99.7 million (S$172 million) for the six-month period ended Jun 30, compared with £237.7 million a year earlier.
It expects annual group operating profit in line with company-compiled estimates of £416 million.
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Weekly net private sales rate for the four weeks ended Jul 28 stood at 0.64 units per outlet, compared with 0.47 homes a year earlier. REUTERS
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