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

Aaron Morby 8 years 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.

Pete Redfern says Taylor Wimpey's strategy is differentiated by a long term focus on value
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 £60m raft of NHS projects

Mid and South Essex NHS Trust plans six projects
9 hours ago

Peri buys shoring and temporary bridge specialist Mabey Hire

Scaffolding and formwork specialist expands offer
13 hours ago

Vinci/McAlpine go-ahead for £312m Midlands hospitals revamp

Shrewsbury and Telford Hospital NHS Trust gets full business case approval
16 hours ago

Lendlease puts construction arm up for sale

After two decades of global expansion Lendlease retreats to Australia
1 day ago

Mount Anvil seals Isle of Dogs estate rebuild

Firm will build 300 new homes at East London's Tiller Road Estate
16 hours ago

Northumbria Uni invites bids for £75m CHASE project

12-storey student block to be demolished for new Centre for Health and Social Equity
15 hours ago

Civils firm Akela appoints former Robertson director as MD

Framework expert Robert Ogg to lead growth at Scottish contractor
16 hours ago

McLaren to build new Hertfordshire primary school

Contractor to prioritise local suppliers on High Leigh Garden Village site
15 hours ago

Developer picked for Stafford town centre regeneration

ION Developments will draw up detailed plans for mixed-use Eastgate scheme
16 hours ago

Former Crossrail boss Mark Wild to lead HS2

Wild to bear down on spiralling costs and bring rejigged scheme in on time
2 days ago

Receivers in at £125m Manchester tower developer

Domis Construction walked away from scheme following doubts over funding
3 days ago

Costain A1 £260m dualling job finally gets go-ahead

Ministers sat on planning inspectors report for nearly three years
2 days ago

Election delays decision on Lower Thames Crossing

Planning decision on £1.2bn Luton airport expansion also pushed back six months
2 days ago

Caddick steps-in at former Lane End housing job

Contractor to restart phase of £262m scheme hit by administration
2 days ago

Plans in for Leeds iconic Tetley building revamp

Former brewing giant's HQ to become indoor market and offices
2 days ago

BAM wins first phase of North Devon hospital revamp

New staff accommodation to kick-off hospital redevelopment
2 days ago

McAlpine pulls out of £55m Carlisle Citadels project

University of Cumbria starts hunt for replacement contractor
6 days ago

Strabag UK suffers further big trading loss

Austrian contractor is gearing up for major presence in the UK market
6 days ago

Durham Uni picks UPP for £130m student scheme

Firm will deliver 1,000 self-catered bed spaces
6 days ago

Architects now upbeat after 10-months of work gloom

Larger practices see rising workloads in next three months
6 days ago

Motorist dies after collision with road paver

Police Scotland investigating fatal crash
6 days ago

McLaren Living appoints HG Construction for £69m scheme

Build to Rent scheme will transform former vacant car park site in Leeds city centre
6 days ago

Squibb liquidator probes £2m of “missing” plant

Machinery, cars and scrap metal have disappeared at demolition specialist
7 days ago

Galliford Try to re-enter affordable homes market

Contractor sets out new five-year plan to build margin to 4%
7 days ago

Former Sellar chief to lead civils contractor Kilnbridge

Owen Dannatt joins as new CEO as founder Dermot McDermott becomes Chairman
7 days ago

Hunt starts for nuclear fusion plant construction partner

Fusion energy plant to be built at West Burton coal power station site.
7 days ago

National Grid raises £7bn for big infrastructure upgrade

Rights issue to fund a major round of capital investment in energy infrastructure
7 days ago

Grenfell police probe to last at least until end of 2025

19 companies and 58 individuals could eventually face charges
1 week ago

Mace confirmed on £100m London office retrofit

Work underway on Helical's 100 New Bridge Street job near Ludgate Circus
1 week ago

Wylfa chosen for next big nuclear power station build

Government names Anglesey site for a large-scale gigawatt nuclear power plant.
1 week ago

Contractor services