Taylor Wimpey, one of the UK’s biggest housebuilders, has returned to profit and upgraded its earnings targets after building a record number of homes in the first six months of the year.
The High Wycombe-based firm built more than 7,300 homes in the first half of 2021, almost all of which have been pre-sold, allowing the company to lock in the benefit of soaring house prices triggered by cheap loans, the government’s stamp duty holiday and a pandemic-driven preference for larger houses.
The FTSE 100 housebuilder reported a pre-tax profit of £287.5m for the six months to early July after a £40m loss in the same period last year in the wake of the coronavirus pandemic.
Pete Redfern, Taylor Wimpey’s chief executive, said the company expects to complete between 13,200 and 14,000 houses in 2021, and reach an operating profit for the year of about £820m.
“We have a clear purpose to deliver high-quality homes and create thriving communities and a strategy to ensure the long-term sustainability of the business,” he said.
Taylor Wimpey’s housebuilding rivals Barratt Developments and Persimmon last month predicted that the strong demand for housing would continue even after the government’s stamp duty holiday on property purchases ends in September.
In an interview with the BBC, Redfern dismissed fears that the UK faces a house price bubble and downplayed comparisons between the current housing market surge and the 2007 boom, which led to a crash in property prices and played a key role in triggering the 2008 financial crisis.
“I think we’ve seen a short-term reaction to the pandemic but an underlying stable and healthy housing market,” Redfern said.
“The number of investors buying homes [in 2007] was a very significant part of the market, particularly in the US – but also in the UK, the number of apartments being bought in markets that haven’t traditionally sustained apartments was very high, mortgage lending was significantly laxer than it is today. And also, we’d seen five years of house price growth well above inflation levels. None of those things are true today.
“We are seeing a return of second-time buyers to the market, having had several years following the financial crash where that market has been very subdued, and I think the pandemic has changed people’s mindsets and moved things along.”
Shares in Taylor Wimpey had risen 2.5% in afternoon trading at 169p.