Taylor Wimpey flags profits leap on loans boost

 

Housebuilder Taylor Wimpey nearly went bust in 2009 but hailed thawing mortgage markets today as it flagged up profits at the top end of City hopes.

Just two weeks into 2013, the firm says “consumer sentiment towards the housing market is more positive than we have seen in recent times”, reigniting the threat of long-term price rises as housebuilding fails to keep up.

The firm, which was almost sunk by an ill-timed merger with George Wimpey at the top of the market in 2007, hailed cash flooding into mortgage lending from the Bank of England’s Funding for Lending drive. Government backed initiatives to help first-time buyers — the FirstBuy and NewBuy schemes — are also helping.

Chief executive Pete Redfern is still cautious about the rest of the year but said: “We tend to be a lead indicator of sentiment. We have more than 300 sites and we are seeing a more positive tone. The mortgage market feels more open for business.”

Pre-tax profits this year will be towards the top end of City forecasts of £210 million-£230 million. The firm returned to the dividend list last year and Taylor Wimpey’s order book is already bristling with £948 million in new orders, up 14% on last year.

Net debt, which stood at £1.6 billion four years ago, has been slashed to just £60 million.

The builder has 35 sites in the capital but says the signs of life are not confined to buoyant London and the South-east. “It is fairly broad based in terms of customer and geography,” Redfern added.

Prices are also being boosted by a shortage of housing. Aside from the mortgage market, Redfern said: “The other very significant factor is scarcity of supply. There is high demand, the rental market is very strong and gradually the economics of the housing market are moving in favour of buying.”

He adds: “It seems extremely unlikely that the level of planning permissions is going to increase significantly, while as the economy recovers there will be untapped demand emerging. It is difficult to see how that is not going to lead to house price increases.”

The shares were flat at 74.1p today although investors have enjoyed a 90% rise over the past year.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Neil Pavier: Commercial Analyst

£50,000 - £55,000: Neil Pavier: Are you a professionally qualified commercial ...

Loren Hughes: Financial Accountant

£45,000 - £55,000: Loren Hughes: Are you looking for a new opportunity that wi...

Sheridan Maine: Finance Analyst

Circa £45,000-£50,000 + benefits: Sheridan Maine: Are you a newly qualified ac...

Sheridan Maine: Financial Accountant

£150 - £190 Daily Rate: Sheridan Maine: One of London's leading water supplier...

Day In a Page

No postcode? No vote

Floating voters

How living on a houseboat meant I didn't officially 'exist'
Louis Theroux's affable Englishman routine begins to wear thin

By Reason of Insanity

Louis Theroux's affable Englishman routine begins to wear thin
Power dressing is back – but no shoulderpads!

Power dressing is back

But banish all thoughts of Eighties shoulderpads
Spanish stone-age cave paintings 'under threat' after being re-opened to the public

Spanish stone-age cave paintings in Altamira 'under threat'

Caves were re-opened to the public
'I was the bookies’ favourite to be first to leave the Cabinet'

Vince Cable interview

'I was the bookies’ favourite to be first to leave the Cabinet'
Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat
Saudi Arabia's airstrikes in Yemen are fuelling the Gulf's fire

Saudi airstrikes are fuelling the Gulf's fire

Arab intervention in Yemen risks entrenching Sunni-Shia divide and handing a victory to Isis, says Patrick Cockburn
Zayn Malik's departure from One Direction shows the perils of fame in the age of social media

The only direction Zayn could go

We wince at the anguish of One Direction's fans, but Malik's departure shows the perils of fame in the age of social media
Young Magician of the Year 2015: Meet the schoolgirl from Newcastle who has her heart set on being the competition's first female winner

Spells like teen spirit

A 16-year-old from Newcastle has set her heart on being the first female to win Young Magician of the Year. Jonathan Owen meets her
Jonathan Anderson: If fashion is a cycle, this young man knows just how to ride it

If fashion is a cycle, this young man knows just how to ride it

British designer Jonathan Anderson is putting his stamp on venerable house Loewe
Number plates scheme could provide a licence to offend in the land of the free

Licence to offend in the land of the free

Cash-strapped states have hit on a way of making money out of drivers that may be in collision with the First Amendment, says Rupert Cornwell
From farm to fork: Meet the Cornish fishermen, vegetable-growers and butchers causing a stir in London's top restaurants

From farm to fork in Cornwall

One man is bringing together Cornwall's most accomplished growers, fishermen and butchers with London's best chefs to put the finest, freshest produce on the plates of some of the country’s best restaurants
Robert Parker interview: The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes

Robert Parker interview

The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes
Don't believe the stereotype - or should you?

Don't believe the stereotype - or should you?

We exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor