Taylor Wimpey, the UK’s biggest housebuilder, today revealed it has entered the new year with a 28 per cent rise in orders for new homes as improved conditions and rising prices had enabled the group to reduce its debt.
In a trading update on their performance in the 12 months to December 31, Taylor Wimpey said that it had reduced its borrowings from the £1.5 billion it owed at the end of 2008 to £750 million.
The fall in debt was in part driven by improving house prices which increased during 2009 as market conditions stabilised, rising by £7,000 in the second half of the year to £160,000. However, the annual figure was lower than 2008, when the average price across the UK was £171,000. Prices for affordable homes remained “broadly flat”, at £108,000 in 2009, the same as in 2008.
Although prices rose in the second half of the year, the number of homes completed by Taylor Wimpey last year was down on 2008. The company finished 10,186 homes in 2009, a fall from 13,394 in 2008, with a decrease in both affordable homes and private completions.
Commenting on the year ahead, Taylor Wimpey warned that although current market conditions had improved and are currently “stable”, “the risks of further weakness in the wider economy and reduced mortgage availability remain”. The company expects its full year results for 2009, which will be announced on March 3, to be in line with expectations.
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Shares in the company rose by 2 per cent to 42.5p.
In December, Norman Askew, the chairman of Taylor Wimpey, announced that he would be stepping down by the end of 2010. He has been chairman since 2007, when the company was created by a merger of George Wimpey and Taylor Woodrow, which he previously chaired.
The company, which has operations in the UK, the US, Spain and Gibraltar, secured new lenders earlier this year and also raised £500 million in a rights issue in June.
The company said that average selling prices in the US were down from $291,000 in 2008 to $255,000 last year, whilst selling prices in Spain, where the housing market has also experienced a severe downturn, were also down £10,000 on last year to an average £260,000.