Taylor Wimpey expects build cost rises to ease to 3-4%

Aaron Morby 4 months ago
Share

House builder Taylor Wimpey is forecasting that build cost inflation will ease across the industry to 3-4% after topping 5% last year.

Peter Redfern Taylor Wimpey
Pete Redfern says Taylor Wimpey's strategy is differentiated by a long term focus on value

Announcing record profit and sales growth for 2015, the house builder said the supply of quality subcontractors remained challenging, but looking forward material pricing would remain broadly flat with a reduced rate of inflation on labour pricing.

To reduce the impact Taylow Wimpey said it had agreed product lines and volumes with key suppliers to mitigate long lead times and shortages. 

The firm raised home completions by just 7.5% to 13,470 over the year as it continued to focus on margins which rose to 20%.

This helped raise the contribution to profit of every home built from £50,000 to £60,000. As a result pre-tax profits topped £600m, ahead 28% on the previous year.

Pete Redfern, chief executive, said: “Taylor Wimpey delivered a record performance in 2015, building over 13,000 homes across the UK and contributing over £335m to local communities.

“We are focused on creating long term value and are supportive of policy initiatives that promote sustainability and reduce volatility in the housing market.”

He added: “2016 has continued to be positive across all of our regional markets, with demand strong and good access to mortgages. With a strong order book and high-quality landbank, we continue to work with stakeholders to ensure we open all sites with implementable planning and begin building as quickly and efficiently as possible.”

Group revenue increased by 17% to £3.2bn last year driven by much improved selling prices in the UK, up 8% to £230k and improved completions.

Taylor Wimpey’s land cost per unit sold dropped to £42.4k from £45.1k in the prior year, reflecting the increased contribution from sites acquired through the strategic pipeline and trading from a lower number of sites acquired before the economic downturn. 

Build cost per unit increased to £121.9k (2014: £112.9k).

The house builder ended the year with a record order book, which increased in value by 27% to £1.78bn, excluding joint ventures.

The increase in the order book value also benefitted from a stronger presence in Central London which Taylor Wimpey said was now at optimal scale. This order book represents 7,484 homes (31 December 2014: 6,601 homes).

Redfern confirmed a further £300m surplus cash will be returned to shareholders in July, equivalent to over £22,000 per home.

Latest news

Morgan Sindall bags £39.5m Bournemouth Uni project

Contractor set for University’s Faculty of Health and Social Sciences building project
8 hours ago

August start date for Tyneside triple decker roundabout

John Sisk and Lagan Construction JV will deliver innovative A19/A1058 junction upgrade
5 hours ago

Plans lodged for Redrow/Wates Bicester garden town

Developers aims to build 1,500 homes in next 15 years
6 hours ago

Green light for Laing O’Rourke Liverpool cancer hospital

Work to start in next few months on new Clatterbridge Cancer Centre
11 hours ago

WSP hires Atkins director for Stockport bypass

Feasibility study for the A6-M60 relief road will be led by Nasar Malik
7 hours ago

Construction alliance formed for light rail work

Places for Colas, Barhale, Thomas Vale and Auctus as Balfour Beatty misses out
10 hours ago

Watkin Jones £100m east London student tower approved

Work to start on Stratford tower at the end of the year despite Brexit vote
10 hours ago

Kier wants suppliers for £50m of work near Hereford

Meet the Buyer event this Thursday: Register now
9 hours ago

G F Tomlinson scoops £15.9m Nottingham Uni job

Advanced manufacturing building will be constructed at the University's Jubilee Campus
1 day ago

Kier wins bid race for £25m Mackintosh restoration

Kier beats rivals with "extremely competitive" bid for fire-damaged building
1 day ago

Balfour Beatty chief’s wife buys £200,000 company shares

Quinn holding in construction group rises to 0.7%
1 day ago

Willmott Dixon abandons sale of support services arm

Contractor decides to keep division after bidders wanted to break-up maintenance operation
2 days ago

Firm fined £550,000 after two men fall to their deaths

Couple fell through Euston roadside hoarding into building site basement
1 day ago

Redrow reports buyers unbowed by Brexit

House builder expects strong year-end profits after completions rise 17% to nearly 5,000
1 day ago

HS2 phase one opening could be delayed a year

Spending watchdog warns HS2 timetable unrealistic despite good progress on procurement
1 day ago

Murphy finance chief becomes new Barhale CEO

Matthew Behan to lead contractor as new corporate structure established to broaden portfolio
2 days ago

£10,000 prize to cut roadwork disruption and delays

Amey and Staffordshire council seek smart digital solutions to roadwork traffic delays
1 day ago

Currie & Brown trumps WSP bid for Sweett Group

WSP raises prospect of a bid war as it tells Sweett shareholders to sit tight
2 days ago

Suppliers hit as HOC goes into administration

Redundancies at north London firm as subcontractors left in dark
2 days ago

Student digs developer shrugs off Brexit worries

Empiric confident EU vote will have limited impact on expanding sector
2 days ago

Brexit leaves Heathrow third runway in the air

Fears grow about the future of major infrastructure projects
2 days ago

Bid costs dent Hochtief UK profits

Operating margin drops to 0.7% as profit falls 45% to below £1m
2 days ago

Breakaway trade body formed by rebar producers

Independent rebar producers and suppliers split with BAR
2 days ago

Sinkhole closes busy stretch of A1

Contractors pumping huge hole with concrete in bid to reopen route
3 days ago

Lendlease to start £275m Hammersmith scheme

Construction to start next month on major office project
5 days ago

Contractors call for calm as Brexit victory spooks markets

Construction fears over costs, skills and investment as house builder shares crash
5 days ago

Shepherd Group suffers £74m hit from sold building arm

Strong profits at remaining Portakabin business help to cut group loss to £28m
5 days ago

Bidding set to start on £2bn East London cultural quarter

London Legacy Development Corporation set to procure shell and core work
5 days ago

Building worker critical after being crushed by JCB

Digger at Hebburn housing site believed to have reversed into worker
5 days ago

Plant test cheats website dodges closure threat

CITB chiefs battling to close down site undermining tests for machinery drivers
6 days ago