Taylor Wimpey shares surge amid “resilient” demand

Taylor Wimpey (LON: TW) shares surged on Monday morning as the housing market continues to be resilient after reopening after the second quarter shutdown.

The FTSE 100 housebuilder has said that it expects this year’s financial results to be at the upper end of expectations and remains confident about next year.

Since the lockdown in March, the housing market has boomed amid the short term extension to the current phase of the Government’s Help to Buy scheme and the Stamp Duty Land Tax holiday.

Pete Redfern, chief executive of the group, commented: “The trading backdrop remains resilient and the quick recovery of the housing market is testament to the underlying strength of demand and supportive lending backdrop.

“We have made good progress in the second half of the year to date, maintaining a robust sales rate and building a strong forward order book. Looking ahead, we are on track to deliver full year 2020 results towards the upper end of market expectations and with strong operational momentum and positive forward indicators, our confidence in 2021 has increased. As a result, assuming the market remains broadly stable, we expect to deliver 2021 operating profit materially above the top end of the current consensus range.”

Taylor Wimpey has sold an average of 0.76 homes per site per week since July, which is compared to the 0.93 homes in the same period a year earlier.

The group’s order book stands at £3.0bn, compared to £2.7bn in July. This is an increase of 11%, with the private average selling price in the order book ahead of 2019 levels.

“Looking ahead, we expect the market to support robust sales rates and for prices of new build homes to remain supportive. We are pleased to note the Government’s ongoing support for the housing market, home ownership and, specifically, first time buyers,” said the housebuilder in a trading update.

Taylor Wimpey (LON: TW) shares opened 11.68% higher and are currently trading 11.28% up to 137,21(0901GMT). This year to date, shares in the group have fallen from highs of 237,70.

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Safiya focuses on business and political stories for UK Investor Magazine. Her interests include international development, travel and politics.