Taylor Wimpey shares fell on Thursday after it released a full-year trading statement that could be considered a disappointment compared to its peers.
Taylor Wimpey has reported a slight decrease in completions for 2024, with total Group completions including joint ventures slipping to 10,593, down from 10,848 in 2023.
Persimmon recently reported a 7% increase in completions in 2024.
Average private sale prices fell to £356k from £370k in the prior year. However, the company saw improved sales momentum, with its UK net private reservation rate increasing to 0.75 homes per outlet per week, up from 0.62 in 2023.
The company ended 2024 with a robust order book valued at £1,995 million, representing 7,312 homes, an increase from £1,772 million and 6,999 homes in 2023. Despite this growth, the company noted weaker pricing in Southern England, with the order book showing underlying pricing approximately 0.5% lower year on year.
In terms of land investment, Taylor Wimpey significantly increased its land approvals to around 12,000 plots in 2024, up from approximately 3,000 in 2023, partly due to increased market opportunities before the Budget. The company maintains a substantial short-term landbank of about 79,000 plots and a strategic land pipeline of roughly 136,000 potential plots.
Looking ahead to 2025, Taylor Wimpey reports encouraging early enquiries but remains cautious, noting that growth in volumes will depend on mortgage rates and their impact on affordability.
The company also warned of increased build cost pressures resulting from the recent UK Budget. Despite these challenges, Taylor Wimpey expressed confidence in the sector’s long-term fundamentals and its position to address UK housing undersupply.
“Volumes aren’t expected to ramp up massively in the near term, and there has been some softness in the average selling prices of its houses at a time when some of its peers are seeing modest rises,” said Aarin Chiekrie, equity analyst, Hargreaves Lansdown.
“Taylor Wimpey also called out that the recent UK Budget is likely to increase build costs this year, putting some pressure on margins. With the current economic uncertainty, there’s likely to be plenty of ups and downs in the short term. But for investors looking for exposure to the sector at an attractive valuation, and a nice income stream while they wait for a recovery, Taylor Wimpey looks like a strong choice.”