Taylor Wimpey passes rising costs on to house buyers

Taylor Wimpey has said it has been able to pass on all the soaring costs from squeezed supply chains to its customers as house prices increase.

The housebuilder indicated its business has begun to return to normal pre-pandemic levels, with sales from its outlets being comparable to 2019 levels.

In the second half of the year so far, it has sold 0.91 homes per outlet, compared to 0.93 two years ago and 0.76 in 2020.

Cancellation rates, which hit 21% a year ago, have also returned to a more normal 14%.

Chief executive ​​Pete Redfern said: “We are pleased with performance in the second half to date, and remain on track to deliver full-year 2021 results in line with previous guidance.

“We have been building a strong forward order book for 2022 and continue to see good demand for our homes, supported by a positive market backdrop.”

This backdrop has allowed house prices to increase at least as fast as the cost of building the homes, he added.

The housebuilding industry has been under pressure from price rises and shortages of materials, as well as a shortage of haulage drivers.

However, Taylor Wimpey said there has been an “easing in certain areas” and it expects conditions to gradually improve.

“Despite well-publicised industry supply chain pressures, we are managing our supply chain effectively and are benefiting from our scale and strong partner relationships,” Mr Redfern said.

“We continue to see house price inflation fully offsetting build cost inflation.

“Looking ahead, market conditions remain supportive, and with the benefit of our strong land position we are well placed to deliver against our medium-term targets.”

The business said it is on track to deliver financial results in line with previous guidance, and will ramp up housebuilding in 2023.

Shares remained flat in London on Thursday morning.