Cost of new homes 'will rise 5%'

13 April 2012

HOUSEBUILDER Taylor Woodrow today predicted the cost of a new home will rise by 5% this year as the housing boom shows no signs of slowing down.

The group said recent interest rate hikes have had 'no discernible effect' on housing demand as it unveiled a 30% rise in profits and forecast another year of growth in 2004.

It also reported a strong pipeline of business with demand for homes ahead 39% on a like-for-like basis, while worldwide orders for 2004 totalled more than £1.9bn.

Profits of £304m in the 12 months to December 31 were boosted by £21m of cost savings from a shake-up of UK operations that saw many regional offices close and the new HQ set up in Solihull.

These annual savings are set to rise to £30m this year, with the integration of rival Wilson Connolly expected to lower costs by a further £12.5m this year and £25m by 2005.

The £499m acquisition of Wilson Connolly in September contributed to a rise in turnover to £2.67bn in 2003, compared with £2.2bn a year earlier.

The UK housing business, which accounts for 66% of profits of Taylor Woodrow, operated in 'more normal markets' last year after several years of exceptionally strong house price growth.

Operating profits grew to £244.7m during the year from £177.6m in 2002, although restructuring costs lowered the bottom-line figure by £20m.

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