You are here: Home - Investing - Experienced Investor - News -

Housebuilder Taylor Wimpey recommended as a ‘buy’

Written by: Paloma Kubiak
Helal Miah, investment research analyst at The Share Centre, picks Taylor Wimpey as a ‘buy’ for medium risk investors owing to its steady performance and strong customer demand.

Housebuilding group Taylor Wimpey today released its latest trading statement informing investors of a 1% share rise, during a time in which the market as a whole started off negatively.

This good performance is underpinned by increased customer demand (up 14%), and good access to mortgages. Helal said the total order book stands at 8,811 homes with a value of £2,168m, up 7% and 16% respectively, compared to the same period last year.

The group said the land market remains stable with acquisitions at similar margins to last year. In this environment acquisitions will be on an ‘as needed basis’ and the current size of the land bank of 78,000 plots remains within the right size range for the business.

Helal added that more good news came on the cost front after Taylor Wimpey reported that build costs inflation had reduced, so investors should note the group anticipate that 2016 costs will only rise by 3-4%.

However housebuilders in general have not rallied to the same extent as the rest of the market since the January/February lows, and some believe this could be linked to the EU Referendum set for June.

But Taylor Wimpey has said there seems to be no sign of this as demand remains strong across all regions, although Helal said the referendum concerns should have more of an effect in the London market.

“We continue to rate the company as a ‘buy’ for investors seeking a balanced return and willing to accept a medium level of risk. However, investors need to be wary that there has been increasing talk in the market that the best for the sector may already be behind us and a Brexit will do a lot of damage to confidence in home buying,” Helal added.

The group declared a final dividend of 1.18p per share and a special dividend of 9.2p.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Everything you need to know about being furloughed

Few people had heard of ‘furlough’ before March 2020, but the coronavirus pandemic thrust the idea of bein...

The savings accounts paying the most interest

If one of your jobs this month is to get your finances in order, moving your savings to a higher paying deal i...

Coronavirus and your finances: what help can you get in the second lockdown?

News and updates on everything to do with coronavirus and your personal finances.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
Use both cash ISAs and high interest current accounts, savers urged

Savers need to adopt a more “sophisticated strategy” in today’s environment rather than just chase the highest interest rate on...