15th Jan 2014 08:00
LONDON (Alliance News) - Taylor Wimpey PLC Wednesday became the latest UK housebuilder to report an increase in the number of new homes built and the average selling price of its properties during 2013, boosted in part by the UK government's flagship mortgage financing scheme, Help to Buy.
On Tuesday, rival firm Barratt Development PLC cited the scheme as having a positive impact on the demand for new homes and in particular providing support to first-time buyers.
The first phase of the Help to Buy scheme in England started in April 2013, making buyers of newly built homes eligible for a 20% equity loan from the government on top of their 5% deposit. The second phase, which started in the Autumn, guarantees a portion of a buyer's mortgage.
Taylor Wimpey echoed Barratt, adding that the scheme had helped address significant "unsatisfied demand for housing through increased access to mortgage availability and affordability."
The firm said it had built 11,696 homes during 2013, up from 10,886 in 2012, while its net private reservation rate for the full year was 0.62 homes per outlet per week compared with 0.58 a year earlier.
"Help to Buy continues to prove popular with our customers and, during 2013, we worked with over 2,900 households to take their first step to move onto or up the housing ladder using this initiative," the firm said.
The average selling price on private completions also increased 7% to GBP210,000, from GBP197,000 in 2012, which it attributed to a shift to better quality locations. Taylor Wimpey said it expects prices to soar further in 2014 and remained confident of driving improvement of 200 to 300 basis points to operating margin in 2013.
The housebuilder said it started 2014 in an "excellent" position regarding its order book, with an increase of 27% to GBP1.2 billion at December 31, compared with GBP948 million at the end of December 2012.
During the period, the firm also added to its landbank with 10,000 plots acquired to bring the total strategic landbank to a record level of over 110,000 including pipeline plots.
Taylor Wimpey said it continues to see attractive opportunities in the land market, although it has seen initial signs of tightening in some local markets which it will monitor "very carefully".
The firm's Spanish operations saw a dip in work, with 118 homes completed during the period, down from 156 in 2012, at an average selling price of GBP194,000 compared with GBP197,00 in the previous period.
However, it remained optimistic despite customer confidence remaining "subdued".
"We anticipate that average selling prices will naturally increase in 2014 with increased completions from our newly acquired sites, which are performing very well due to their quality locations," it said.
The total order book in Spain stands at 195 homes, compared with 53 homes in December 2012.
Financially, Taylor Wimpey said full-year group operating margin will be towards the top end of its expectations. It also said it finished the year with a marginal net cash position compared with GBP59.0 million net debt in 2012.
The firm will publish its full year results for the period ended December 31, 2013 on February 2014.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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