Taylor Wimpey set to build on record orders

Despite the uncertainty surrounding May’s general election, interest rates are likely to be on hold for the rest of the year

The chief executive of Taylor Wimpey, Pete Redfern, believes that interest rates are likely to be on hold for the rest of the year (Rex) (Rex)

More money flowing into people’s pockets from lower inflation and a greater sense of job security spells good news for the housing market this year, Taylor Wimpey chief executive Pete Redfern said yesterday.

Wimpey – which flirted with disaster in the financial crisis – begins this year with a record £1.4bn order book, representing 6,600 homes.

Despite the uncertainty surrounding May’s general election, interest rates are likely to be on hold for the rest of the year. Mr Redfern says buyers have been encouraged by a stronger jobs market, with a record 30.8m in work. Meanwhile official figures, due out today, should show tumbling oil prices pushing the cost of living to just 0.7 per cent in December, the lowest since June 2002, while wages are growing around twice as fast.

Mr Redfern said: “People are reasonably confident about their own position. I know the City focuses very heavily on central London and the global macroeconomic market, but our customers focus on their own job security and the cost and availability of mortgages.

“People’s sense of their own job security and the potential for a bit more wage growth this year than the last actually means people are at least as optimistic as they were last year, if not a bit more so.”

A push to better locations and price rises in a strong market meant the average Taylor Wimpey customer paid £213,000 last year – £22,000 more than 2013. This leaves the company on track to return £250m to shareholders in July.

This year will be “more balanced” according to Mr Redfern, but the Chancellor’s stamp duty changes are already having an effect on the market, particularly at the £250,000 mark, when the tax jumped from 1 per cent to 3 per cent of the total purchase price under the old system. “In the past, you’d actively try not to build a house worth £260,000 because you knew you would never get £260,000 for it,” he said. Under the new arrangements, stamp duty is paid like income tax, with only the portion of the house purchase above new thresholds attracting fees rather than the total house price.

The company began 2015 with 305 outlets – slightly below 2014 – but this was because of sites running out of homes to sell and closing down due to healthier market conditions. Margins were higher than expected and the group – once laden with £2bn in debt in 2009 – generated net cash of £113m last year.