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The Markets
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The Markets
by Proactive
Proactive UK has moved.
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The Markets
by Proactive
Proactive UK has moved.
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Real Estate

Taylor Wimpey upbeat despite house price slowdown

Housebuilder positive about the rest of 2016 but Nationwide figures point to market slowdown

Taylor Wimpey (LON:TW.) gave another upbeat assessment of its prospects but figures showed house prices suffering their lowest rise since June last year.

The housebuilder said it was doing well with a 14% rise in customer demand for its homes against last year and good mortgage availability driving strong sales.

Total orders stood at 8,811 homes versus 8,200 last time while Total orders lifted 16.6% to just short of £2.2bn against nearly £1.9bn last time.

Taylor Wimpey said it had already tied up about 70% of its planned sales for 2016, which left it well-placed for the rest of the year.

Chief executive Pete Redfern said: "Against the backdrop of a positive housing market, Taylor Wimpey is performing well.

"We remain on track to make good progress towards all our medium-term targets in 2016."

But that was not quite the message emerging from the monthly house price report from building society Nationwide, which reported a small 0.2% month-on-month rise in April.

That was markedly down from 0.8% and the equal lowest rise, along with November, since June 2015.

Annual house price inflation slowed to 4.9% in April from a 13-month high of 5.7% in March.

Economists said the market had slowed following the rush to beat the rise in stamp duty on buy-to-let properties introduced at the start of April.

Howard Archer at IHS Global Insight said increased domestic economic and political uncertainty may also be reining in housing market activity, particularly ahead of June’s EU referendum.

"Consequently, house prices may well be softer for the next few months," he said.

Liberum Capital was also not quite as positive as Taylor Wimpey, echoing Archer's view of market prospects.

The broker, which has a 'sell' recommendation on the housebuilder, said its shares looked expensive and growth companies in the sector were a better bet.

"We note that the pace of order intake is now flat on last year, having been well up at the start of the year," the broker said.

"Margin progress will continue in 2016 but we continue to expect house price inflation to moderate as affordability bites and build cost inflation persists."

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