Taylor Wimpey says UK trading strong; no impact from 'Brexit' fears

The prospect of a British exit from the EU had not affected trading at house builder Taylor Wimpey in the first four months of the year, the company said on Thursday, adding that underlying demand was “solid” across all the countries it operated in.

“Due to our customer base and supply chain being based principally in the UK, together with our strong order book, we are well equipped to react to any potential changes in the market that may be caused by the EU referendum,” Taylor said in a trading statement.

The UK votes on whether to stay or leave the EU in a referendum on June 23.

"In the first four months of 2016, the new build housing market remained very positive across most geographies, with good accessibility to mortgages at competitive rates. In central London, the market continues to be stable," Taylor said.

“The UK housing market continues to be underpinned by good mortgage availability and employment prospects. As at 24 April 2016 we are around 70% forward sold for 2016 private completions, positioning us well for the remainder of the year and beyond. As expected, the rate of build cost inflation has reduced, and we continue to anticipate underlying build cost increases of 3-4% in 2016.”

Customer demand was up 14% compared with the same period last year, driving a strong sales rate. Average private net reservation rates increased to 0.80 sales per outlet per week for the year to date against 0.76. Cancellation rates remained static at 11%.

Taylor's order book currently stood at 8,811 homes against 8,200 in 2015, excluding legal completions to date. Total order book value rose by 16.6% to approximately £2.68bn year on year, and by 21.9% from the year end.

"The short term land market remains stable, and we continue to be able to source land at investment operating profit margins similar to those sourced in 2015," Taylor said.

"In this environment, we remain disciplined and committed to improving our return on capital employed. At the end of March 2016, our short term landbank stood at around 78,000 plots, following the conversion of more than 3,000 plots from the strategic land pipeline, and remains within the right size range for our business. Our strategic land pipeline stood at around 105,000 potential plots, as at the end of March 2016."