Taylor Wimpey Says UK House Prices Rising in Face of Cool Demand

2023-08-02 14:53

UK homebuilder Taylor Wimpey Plc says house prices have stayed resilient even as soaring mortgage rates cool demand.

Taylor Wimpey’s average UK selling price rose 6.7% to £320,000 ($408,420) in the first six months of the year compared with the same period in 2022, the company said in a statement Wednesday. The homebuilder reported its average weekly private net sales rate in the first half of the year was 0.71. That’s an improvement on the second half of 2022, when the rate was 0.48, but still short of the 0.9 average for the same period last year.

“The first half of the year has been characterised by variable market conditions including substantially higher mortgage rates,” Chief Executive Officer Jennie Daly said in the statement. “While this has inevitably impacted our results, I am pleased that we have delivered a resilient performance with first half completions slightly ahead of our expectations.”

UK households are facing an avalanche of pressures triggered by rising interest rates and the worst cost-of-living crisis in a generation. Key mortgage rates have soared above 6% this summer, leading to a flurry of downbeat earnings reports from the nation’s biggest developers.

Read more: Vistry Reports Slide in Home Sales After Surge in Mortgage Rates

Taylor Wimpey said its cancellation rate in the four weeks ended July 30 — an early indicator of distress in the housing market — was 24%, compared with 19% in the same period a year earlier. The company said house price growth was not able to fully offset build cost inflation in the period, but said it expects the rate of inflation to moderate in the second half of the year.

Still, the housebuilder expects to sell 10,000 to 10,500 homes in the full year, which is toward the top end of its previously forecast 9,000 to 10,500 homes. The company said underlying interest remains strong, even despite high mortgage rates.

“We remain well positioned to manage the business through near term challenges while maximising value in the medium to long term,” Taylor Wimpey’s Daly added.