The average selling price for private completions increased six per cent to more than £350,000 according to one of the UK’s largest construction companies.
Taylor Wimpey released its 2022 overview today, saying total completions were a shade under last year’s at 13,154, compared to 14, 302.
It said of the completions, more than a fifth (21 per cent) were ‘affordable homes’, up from 18 per cent in 2021, while the cancellation rate also went up to 18 per cent from 14 per cent on the pandemic-impacted previous year.
This comes as millions of Brits find themselves in a mortgage squeeze with interest rates increasing and putting pressure on the cost of borrowing and repayment, while rents are also soaring, leaving many with few options for accommodation.
Taylor Wimpey said the UK average selling prices for private completions went up to £352,000, an increase from £332K in 2021.
Its order book was slightly down on 2021 however at £1.9bn compared to £2.5bn.
In wake of Liz Truss’ disastrous mini-budget which caused the economy to spin into turmoil and increased prospective homeowners’ borrowing costs, the firm said “as market conditions changed at pace in the third quarter we acted quickly and decisively implementing even tighter cost scrutiny, significantly reducing land commitments, and closely controlling the release of investment in work in progress.”
Looking ahead to 2023, Taylor Wimpey said planning has become more difficult with “delays and resource pressures impacting housing land supply”.
It said the “ongoing market uncertainty means that sales remain significantly below levels seen prior to the rise in mortgage rates in Q3 2022.”
Through a consultation, the company is also looking to make annual savings of around £20m, while also recommitting to net zero goals, and ranking fifth on FTSE 1000 in the Responsibility100 Index Walk Score for ESG.
“The business performed well in 2022, as our tight operational controls and price discipline led to an improved operating margin”, said Jennie Daly, CEO.
“Despite the economic and political backdrop through the second half, I am pleased that we expect to report full year operating profit in line with expectations”, which is at £921m.
“As previously reported, we have acted quickly and decisively to address changing market conditions and continue our efforts to maximise efficiency.”