Lower interest rates help Taylor Wimpey to 4% rise in home completions
Home builder Taylor Wimpey is celebrating a 4% jump in home completions last year, saying lower interest rates and a wide range of mortgages helped drive sales.
The company said home completions in the UK including joint ventures jumped to 13,881 in the year to December 31, while the overall average selling price rose by 11% to £255,000 from £230,000 in 2015.
The High Wycombe-based firm credited low interest rates with helping to ramp up demand.
"Customers continue to benefit from a wide range of mortgage products and low interest rates with customer confidence remaining robust," Taylor Wimpey said.
The FTSE 100 house builder saw a slight rise in the cancellation rate from 12% to 13% and a drop in the private reservation rate from 0.73 homes per outlet per week to 0.72.
The year-end order book excluding joint ventures edged lower to £1.68 million from £1.78 million.
Taylor Wimpey said this was due to a small fall in the average selling price in the order book, given that a number of "high value" central London homes were completed in December, rather than being carried over to the new year.
Chief executive Pete Redfern said the company was pleased with the figures, considering "wider macroeconomic uncertainty".
"In a market characterised by solid fundamentals, we ended the year with a strong forward order book and made good progress against our enhanced medium-term targets."
Taylor Wimpey's latest trading update comes ahead of its earnings release on February 28, when analysts expect full-year operating profits to come in between £706.4 million to £755 million.
Mr Redfern said profits are expected to come in at the upper end of market consensus.
Hargreaves Lansdown equity analyst George Salmon said: "After an initial Brexit dip, house price growth and mortgage approvals have both stabilised recently and, as might be expected for a country with such a chronic housing shortage, the fires of demand continue to burn strongly.
"However, despite things looking brighter, the group continues to adopt a more cautious approach to land acquisitions. This is sensible as all manner of potential knock-on effects are still possible for the UK economy as Britain negotiates its exit from the EU."
Taylor Wimpey shares were down 1.3% in midday trading.