Taylor Wimpey makes good progress in Yorkshire

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Housebuilder Taylor Wimpey said home buyer demand has remained strong despite Brexit uncertainty and said it expects stable house sales volumes in 2019.

The group said 2018 was another strong year as it reported record revenues and said 2019 has got off to a “very positive” start, boosted by strong demand in Yorkshire.

Taylor Wimpey completed 1,966 homes in Yorkshire and the North East in 2018, up 7 per cent on the previous year.

The group’s finance director Chris Carney said: “Our Yorkshire sites have been really positive. The investment in Yorkshire has been made over quite a long time. This market has always been a strong one for us.”

Average house prices in Yorkshire have stayed stable at £210,000.

“Our customers are at the centre of things. We have improved our customer service and our build quality,” said Mr Carney.

“Over 90 per cent of our customers recommend us, making us the quality of a 5 star builder.”

There are 39 Taylor Wimpey outlets across Yorkshire.

The group posted a 5.5 per cent increase in underlying pre-tax profits to £856.8m in 2018.

Taylor Wimpey said it has seen strong home-buyer demand in spite of increasing signs that Brexit worries are weighing on Britain’s property market.

Asked about the impact Brexit is having on the group, Mr Carney said: “There are some things you can’t control. We can mitigate the impact.”

He said the group has not suffered from a shortage of EU construction workers.

“There was a concern that there would be an exodus of workers, but we’ve just not seen that. However, Brexit would make it harder for workers to come to the UK,” he said.

The group said its order book now stands at 9,622 and it expects stable house sales volumes in 2019 due to the current market conditions.

It added that it will continue to see pressure from rising build costs, which it expects to increase by similar levels to 2018 - at around 3 per cent to 4 per cent.

In terms of materials, Mr Carney said that more than 90 per cent of Taylor Wimpey’s materials are sourced from the UK.

The group’s chief executive Pete Redfern said: “2018 was another strong year for Taylor Wimpey with good progress against our strategic priorities.

“Despite ongoing macroeconomic and political uncertainty, we have made a very positive start to 2019 and are encouraged to see continued strong demand for our homes.”

The results showed that, on a statutory basis, pre-tax profits rose 19 per cent to £810.7m.

Housebuilders have been boosted by ongoing low interest rates as well as the extension of the Government’s Help to Buy scheme to allow first-time buyers to purchase a new build with just a 5 per cent deposit.

Speaking about the results, analyst Gavin Jago at Peel Hunt said: "A good start has been made to meet current year guidance of broadly flat volumes. Combined with stable pricing and build cost inflation we forecast margins to reduce slightly to 20.9 per cent in the 2019 with pre-tax profit around 2 per cent lower than 2018.

"Management has reiterated strong volume growth potential from 2020 onwards, but for now we leave our forecasts unchanged.

"The shares have risen by 25 per cent in the year to date compared to the sector average of plus 20 per cent. Given the robust recent trading our confidence in the investment case has improved and we increase our target price to 165p."