UK residential developer Taylor Wimpey plc released strong half year results for the period ended 30 June 2013 on Wednesday, which suggest the housing market is improving sustainably, helped by the economic recovery, further mortgage lending and the effect of Government schemes such as the Help to Buy scheme.
The home building group revealed that its UK operating margin increased to 13.5% compared to 11.2% in 2012. In the first half of this year the company said it completed 5,191 homes at an average selling price of GBP188,000, an increase on the 5,083 homes completed in 2012 at an average price of GBP176,000.
In addition, Taylor Wimpey announced that it has achieved a record order book of GBP1.3bn, up 35% in value, in comparison to GBP960.1m as of 1 July 2012. There was also a 24% rise in volume to 7,101 homes, from 5,720 in the same period last year.
Approximately 1,300 homes, or 17%, on the company’s order book were reserved through the Help to Buy scheme, which was introduced in April this year and is designed to help first-time homeowners. The GBP130m scheme provides banks with a guarantee of up to 20% of the price of a new-build home worth up to GBP600,000 and is said to have continued to help drive sales rates in an improving market.
Taylor Wimpey’s chief executive, Pete Redfern, said: “During the first half of 2013, there has been meaningful improvement in the housing market, with more positive consumer sentiment, a more available and affordable mortgage market and the presence of Government mortgage schemes, all adding to a favourable outlook. Our business is ideally positioned to perform well in this environment with a strong land position and a very effective housebuilding operation. We continue to open all new outlets with implementable planning permission.”