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Taylor Wimpey Results Point To Soft Landing In UK Resi Property

REAL ESTATE SECTOR

Taylor Wimpey (TW/ LN) , one of the major UK housebuilders, has put a relatively positive trading stmt out with good profit guidance. Not a major credit name but indicative for UK resi property overall.


  1. The pipeline of new business is lower than a year ago (GBP1,772m vs. GBP1,941 at Dec-22 and GBP1.9bn at Oct-23) and total completions was lower (10,848 last year vs. 14,154 in '22) but we already knew '23 was a weak year for housing.
  2. Cost inflation continues to moderate and guidance is for c.4% in 1H24 completions (from 6% at Jun-23 and nearer 10% in early '23). The BoE, amongst others, will be relatively happy to hear this.
  3. Positively, mgmt are now guiding to operating profit at the top end of its range (GBP440m-470m, BBG consensus is showing GBP465m). Further, their qualitative outlook includes "good levels of enquiries" and that recent rate cuts "will improve profitability".
The equity is broadly unchanged this morning but at least this is another indicator that the UK housing market appears (at this very early stage) to be looking at a softer (vs. harder) landing, which is a relative positive across the broad REIT credit space.
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