Taylor Wimpey boosted by government's Starter Homes Initiative

 
Emma Haslett
Follow Emma
Economic Warning Signs Increase
Average selling prices rose eight per cent in 2015, it said (Source: Getty)

Another year, another strong performance by housebuilder Taylor Wimpey, which built more homes in 2015 than at any point in the last six years.

The figures

In a trading statement today, total home completions rose seven per cent to 13,341 in the year to the end of December, up from 12,454 in 2014 - including 2,509 affordable homes (that's 19 per cent of the total).

Average selling price for private completions rose nine per cent to £254,000, up from £234,000 last year, while the overall average selling price rose eight per cent to £230,000.

Meanwhile, the company said its order book rose in value by 27 per cent to £1.8bn, representing 7,484 homes.

It added that it will report an operating profit margin of over 20 per cent for 2015, up from 17.9 per cent in 2014, and will end the year with net cash of £225m.

Taylor Wimpey Taylor Wimpey | mobile image

Why it's interesting

The government did everything in its power to encourage housebuilders to, well, build last year - so the news Taylor Wimpey built so many new homes last year will come as music to George Osborne's ears.

So it's hardly surprising the company said it had been boosted by government policies, including the Starter Homes initiative, which will provide incentives to build homes which will be sold at a discount to first-time buyers.

The only fly in the ointment could be an interest rate hike, which would put people off getting mortgages. But market expectations suggest rates will stay at 0.5 per cent until March next year. So as far as Taylor Wimpey is concerned, it can't build fast enough.

What Taylor Wimpey said

Pete Redfern, the company's chief executive, said:

We have delivered a strong trading performance in 2015, in a positive housing market, building more homes than at any point in the last six years and delivering a record operating profit margin of over 20 per cent. We are confident that the principles we are operating to will deliver long term sustainable value across the housing cycle, and we remain focused on working with communities and our customers, suppliers and employees to drive continual improvement in the quality and consistency of our operational business.

In short

Housebuilding these days, eh? It's a licence to print money. As long as rates are low, the company will continue to thrive.

Related articles