Taylor Wimpey said that its 2017 operating profit margin will be higher than last year’s 20.8% and 2018 would be even better.
Chief executive Pete Redfern said: "Taylor Wimpey has performed strongly during the second half of 2017, delivering excellent sales rates and making further good progress against our operational targets. While we are alert to potential political and economic risks, demand for new housing remains high across the UK and market conditions are favourable. Notwithstanding the recent small increase in the base rate, we have continued to see stability in trading patterns.
“Looking ahead, we are on track to meet our full year expectations and deliver further growth and performance improvement in 2018. With a strong balance sheet in place and a high-quality landbank, our business is very well positioned to deliver sustainable growth."
Build costs are expected to increase 3-4% this year, as previously indicated, with the greater pressure coming from labour costs and a more modest level of cost inflation in building materials.
Taylor Wimpey has added 13,700 plots to its short term landbank in the year to the end of October. The short term landbank has thus grown slightly to approximately 80,000 plots, with the strategic landbank at 107,000 plots.
Taylor Wimpey made provisions of £130m in the first half of the year to cover the costs of reforming its controversial leasehold policy. It has subsequently reached agreements with freeholders to enable the substantial majority of customers with a 10-year doubling lease to convert ground rent terms to an RPI based structure, if they want.