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Taylor Wimpey profits rise as average private sale price hits £337,000

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Aylor Wimpy reported strong profits and said it expects sales to increase for the rest of the year, even as signs of a slowdown in sales in the broader industry coincide with rising interest rates and a deepening cost-of-living crisis.

The developer reported half-year pre-tax profits of £335m, up more than 16%. Its average private sale price reached £337,000 in the first half of the financial year, up 3.1%, down from 6.5% in the same period last year. The number of completed sales in the six months to July 3 reached 6,790, beating expectations. It forecasts 4% to 5% completion growth for the full year.

But it may not be the easiest time to buy a home in the rest of 2022. Today, the company behind Your Move and Reeds Rains gained new insight into the delays caused by a shortage of vehicles across the industry. LSL Property Services said the delays in completing the building had led to an operating loss of £1m in the estate agency’s operations, without which underlying profit would have been £6m higher in the six months to 30 June.

The absence of conveyors, who play a crucial role in the sales process, comes after the pandemic adjustment brought the industry to a standstill, triggering a subsequent boom that saw many people leave the profession, leading to a shortage of skilled personnel. deferred demand remains.

“We note that the level of private sales in July is relatively low, but it is not yet clear whether this is a seasonal problem or a sign of things to come,” said Ollie Creasy, an analyst at Quilter Cheviot, an investment manager at Taylor Wimpey’s. numbers.

The slowdown in sales comes at a time when the industry is facing inflation forecasts of 11% for the autumn, energy costs are surging as homes turn on the heat and interest rates are likely to rise. This can make it more difficult to match a mortgage, while buyers with credit deals will take longer to complete a sale.

The Bank of England will raise rates again tomorrow. Some City forecasters expect a rise of 0.50%, double the usual increase, which would bring the rate on which many mortgages are based to 1.75%, well above the pandemic’s historic low of 0.1%.

Data from Nationwide this week showed a fall in mortgage approvals in July, while overall prices rose 11% year-on-year, consistent with a sense that a strong property market is facing some uncertainty.

Taylor Wimpey CEO Jenny Daly was optimistic about the company’s prospects: “Housing market fundamentals remain positive, supported by persistent supply-demand imbalances and good availability of attractively priced mortgages,” she said. “Demand for our homes remains high.”

LSL also said its sales pipeline was “strong”.

Shares in Taylor Wimpey rose more than 4% to 125p on Wednesday. LSL fell by 2.2% to 317p.

Taylor Wimpey profits rise as average private sale price hits £337,000

Source link Taylor Wimpey profits rise as average private sale price hits £337,000

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