Commercial Property News

Taylor Wimpey plc, the UK's number three housebuilder, in a trading update ahead of its Half Year Results for the period ending 4 July 2010, said today that the UK housing market has maintained an encouraging level of stability so far and that mortgage availability is gradually improving.

TW expect to complete around 4,650 homes in the first half of the year (H1 2009: 4,702) at an average selling price of approximately £167k (H1 2009: £153k). They are concentrating on improving their margin as reflected in the increase in average selling prices.

Like Berkeley  said last Friday, TW also have  seen a slight softening in sales around the time of the General Election, but TW 's sales performance has strengthened in recent weeks and their order book remains strong - now 83% sold for their full year targeted completions.

TW expect to have reduced net debt to approximately £650 million at the period end (31/12/2009: £750.9 million), including the effect of accelerating selected creditor payments from the second half to take advantage of available operating cashflow covenant headroom.   

TW believe the underlying shortfall of new build housing and the strong levels of demand will continue to underpin pricing in the housing market in the UK.  In the short term, however, with ongoing political and economic uncertainty, they continue to run the business on a cautious basis, with selective land investment and an ongoing focus on costs and cash. TW will remain cautious about the scale and pricing of  land buying whilst the broader economic uncertainty remains.

UK house prices remain under pressure due to macro economic uncertainty. House prices in May fell 0.4%, according to mortgage lender Halifax, while the Nationwide Building Society reported a 0.5% rise for the month, half the rate of the previous two months.

TW also operates in Spain & Gibraltar and across the Atlantic in both the US and Canada. The two North American markets are both performing quite well, with Canada making strong progress, while TW is winding down it's Iberian operations.

Shares in Taylor Wimpey closed at 30.46 pence on Friday, valuing the company at £1 billion.