Housebuilder Taylor Wimpey today said it is on track to weather political uncertainty to deliver on guidance thanks to low interest rates and the government's Help to Buy scheme.
Sales rates for the year to date were 0.81 per outlet per week in the second half of 2018, unchanged from last year, though cancellation rates were up marginally to 14 per cent from 13 per cent last year, Taylor Wimpey said in today's trading update.
While the firm cut 24 outlets to operate 261 stores, down from 285 it had last year, it has built 9,783 homes so far this year, up 12 per cent from 2017, as low interest rates, a wide range of mortgage options and the government’s Help to Buy scheme all contributed to robust demand for new build homes.
The company’s order book is roughly £2.4bn, an increase from £2.2bn last year, and it expects to boost its cash flow to around £600m come the end of the year, up from £511.8m at the end of 2017.
However, shares fell 1.5 per cent as the company warned it could be affected by the uncertainties surrounding Brexit.
Chief executive Pete Redfern said: “We have delivered a strong performance during the second half of 2018, with very good sales rates supported by positive customer demand and a supportive lending environment. This builds on our strong forward order book and puts us on track to meet full-year expectations.
“Looking ahead to 2019, we remain mindful of wider political and economic risks and the potential impact on customer confidence. However, with a strong balance sheet in place and a high-quality land bank, our business is well positioned to deliver further sustainable growth and cash flow over the medium term.”
Taylor Wimpey also said build costs are expected to rise between three per cent and four per cent this year and that it has seen signs of customer caution, particularly in the south east.
The housebuilder said political and economic uncertainty is behind the caution, and as a result expects its 2019 sales volume to be broadly flat.
However, it said there is potential for growth from 2020 onwards.