Its positive housebuilding target chimes with policy set out this week by Britain’s new Labour government, which wants to increase home construction to ease Britain’s housing crisis
Britain’s Taylor Wimpey expects to build close to the upper end of its annual housebuilding target in 2024, it said on Wednesday, reflecting market expectations of a demand recovery as mortgage rates drop.
Shares in the FTSE 100-listed housebuilder, which have increased nearly 8% so far in 2024, added nearly 2% by 0935 GMT, reaching their highest level since January 2022.
Its positive housebuilding target chimes with policy set out this week by Britain’s new Labour government, which wants to increase home construction to ease Britain’s housing crisis.
British housebuilders have been betting on a near-term recovery in the sector, which has seen subdued demand for most of this year, on easing mortgage rates and strong competition among lenders.
Many of the top UK lenders have reduced mortgage rates this month following cuts in early 2024, although a delay in the BoE’s monetary policy loosening has interrupted continual cuts in home loan rates through the year.
Taylor Wimpey, which also posted a slump in half-year profits, said it now expects to build close to its target range of between 9,500 and 10,000 homes in 2024 in the UK.
The prospect of UK rate cuts boosting the housing market continues to be the driver for housebuilders, and the solid outlook for completions supports the view that demand will rise again in the months to come, Chris Beauchamp, chief market analyst at IG, said in a note.
Taylor Wimpey CEO Jennie Daly told analysts in a post-earnings call that the group is seeing good levels of customer interest and the quality of inquiries is good, although there is definitely an affordability issue.
