Taylor Wimpey followed in Persimmon’s footsteps on Wednesday in releasing a trading statement punctuated by falling sales rates and deterioration in key metrics.
Anyone that read our summary of Persimmon’s update yesterday may feel elements of Taylor Wimpey’s release have been copy and pasted over.
Taylor Wimpey net private sales rates per outlet fell to 0.74 year-to-date from 0.95 in 2021 while the sales rate sank to 0.51 in the most recent half year.
Cancellation rates rose and the number of homes in their order book fell.
Despite the worrying metrics, Taylor Wimpey shares were marginally positive on Wednesday morning after suffering on Tuesday in sympathy with Persimmon’s update.
“In a challenging economic and political backdrop we are performing well and are on track to deliver full year operating profit* in line with market expectations,” said Jennie Daly, CEO at Taylor Wimpey.
“While sales rates have been impacted by wider economic uncertainty, we continue to see good levels of customer interest in our homes and a desire to get onto or move up the housing ladder.”
The desire to move up the house ladder may well be there, but the ability for homeowners to do so is diminishing. Rising mortgage rates is putting pressure on affordability at a time householders are facing soaring energy bills.
Despite the short term concerns at Taylor Wimpey, the long terms their fundamentals are supportive. Notwithstanding the challenging environment this winter, Taylor Wimpey has a solid landbank and the long term shortage of UK housing will ensure demand long into the future.
