Soaring house prices offset rising costs for Taylor Wimpey

One of the UK’s biggest housebuilders has said a spike in the price of its homes has fully made up for the soaring costs of staff and building materials, and supply chain shortages.

Taylor Wimpey’s boss said the firm delivered an “excellent performance” last year, and that demand remains strong for the company’s newly-built homes, which became £12,000 more expensive.

It completed more than 14,000 last year, up by nearly half from the year before.

In 2020 construction sites were forced to close down for several months of the year, so the number of completed homes was considerably lower than previously.

However, Taylor Wimpey still built around 2,000 fewer homes in 2021 than it had in 2019, it revealed on Monday.

Chief executive Pete Redfern said: “We have delivered an excellent performance in 2021 and expect to report full-year results in line with our expectations.

“Market conditions remain supportive and we continue to see strong demand for our homes.

“Our strategy of optimising sales rates, prices and operational excellence and efficiencies is enabling us to drive a significant improvement in operating margin.”

The average price for a Taylor Wimpey home rose by 4.2% to £300,000 last year.

The company said it has identified all the homes it has built which might need work to take down dangerous cladding that has become a concern after the Grenfell disaster.

The business said last year that it would cover the costs needed to replace cladding on all of its buildings from the last two decades.

It said the money it has set aside to cover this still appears to be a reasonable estimate of the costs.

“We continue to believe this is an industry-wide issue that needs an industry-wide solution and will continue to work with Government to try to help resolve these wider issues,” it added.

The firm told shareholders on Monday that it expects to return to making operating margins of between 21% and 22%.

Mr Redfern said: “Looking ahead, we are well placed to deliver against our targets.

“The outlook is positive and Taylor Wimpey is particularly well positioned.

“We maintain a sharp focus on delivering sustainable growth, strong profitability, and increased cash returns for shareholders over the long term.”