Taylor Wimpey

Completions and profits up at Taylor Wimpey

Taylor Wimpey chief executive Pete Redfern has predicted a stable year ahead after the housebuilder continued to see good demand and trading throughout 2017.

In an end of year trading statement issued today Taylor Wimpey revealed housing completions increased 5% to 14,541 homes, with an improved operating profit margin of 21.2% (2016: 20.8%).

The company has £512 million net cash in the bank (compared to £365m this time last year) even after paying out £450m of dividends to shareholders in 2017 (2016: £356m). This year it plans to give £500m back to shareholders.

Mr Redfern said that its 2017 financial results, to be published next month, would be in line with expectation and the momentum was continuing into 2018.

He added: “We achieved a strong financial and operational performance in 2017 and are continuing to deliver against our strategy. Despite wider macroeconomic uncertainty, housing market fundamentals remain solid and our trading performance has been good. We continue to increase housing completions, achieving 5% growth during the year, and ended 2017 with a good forward order book.

“We were particularly pleased with the improvements in our customer satisfaction metrics during the year, which were the result of a number of changes made to our approach in 2016. In the last six months we recorded average customer satisfaction scores of over 90%, and we will continue to prioritise making further improvements in this area.

“We go into 2018 with positive momentum and expect to achieve further progress against our medium term targets. Our focused strategy of managing the business through the cycle, while also driving further operational improvements, will enable us to continue to deliver long term value for shareholders.”

Flooding claims fail to prevent Newton Mearns housing plan

A legal bid to prevent the development of more than 800 homes at Newton Mearns has been rejected by the Court of Session.

The joint CALA Homes and Taylor Wimpey project at Maidenhill Farm is set to deliver a new neighbourhood of 834 new homes in total with pockets of land provided to facilitate the delivery of affordable housing, a new primary school and a number of community facilities.

However Colette Patton from the Newton Mearns Residents Flood Prevention Group took East Renfrewshire Council to the Court of Session for a judicial review of the authority’s decision to grant permission for the development last year.

Ms Patton is concerned that an existing flooding problem will be greatly exacerbated by the new homes and argued that the report to the council’s planning committee was inaccurate.

But in a written judgment, Lord Glennie ruled East Renfrewshire Council acted in accordance with the law.

He wrote: “It was not seriously in dispute that there is a well-recognised and long-standing risk of flooding in Newton Mearns, Mearns Village, and the surrounding area. The Scottish Environment Protection Agency (Sepa) has designated Newton Mearns a potentially vulnerable area as part of the wider White Cart Catchment. This fact is a material part of the background to the dispute presently before the court.”

He added: “I am satisfied that the committee had before it all relevant material. The report adequately summarised that material. I do not find it established that the committee was misled, either because the report omitted relevant material or because it was misleading in any way.

“Nor was its decision irrational. It seems to me that the case for the petitioner amounts, in substance, to a disagreement with the decision taken by the committee in granting the planning application. It is well established that the court cannot interfere on that basis.

“Provided the committee is properly informed of the issues, of the material, and of the planning law and guidance to be followed, the court will not interfere simply because there is an argument, however honestly pursued, that it should have arrived at a different decision. I am far from persuaded that its decision was wrong, but even if it was, that would not be a basis for interfering.”

Council completes sale of former Hermitage Academy site in Helensburgh

Taylor Wimpey's designs for land at the former Hermitage Academy site

Taylor Wimpey’s designs for land at the former Hermitage Academy site

Construction work to deliver 95 new homes at the former Hermitage Academy in Helensburgh is to start within the next few weeks after the site was sold to a national housebuilder.

Argyll and Bute Council has granted planning permission for the development of two, three and four bedroom family homes following the sale of the site to Taylor Wimpey West Scotland.

Councillor Gary Mulvaney, Argyll and Bute Council’s policy lead for strategic finance and capital regeneration programme, said: “This is fantastic news for the area. There are already over 50 houses and flats on another part of the site and when construction of the new homes by Taylor Wimpey West Scotland gets underway there will be a significantly increased supply of houses made available for local people and, others hoping to move to this area.

“As a council we are committed to working with Taylor Wimpey West Scotland to support our local economy and community by creating and supporting local jobs and apprenticeships.

“The funds from the sale will benefit our communities by going directly to providing services they tell us are important to them. I would also express my thanks to the council team who worked so hard to make this sale happen.”

Stephen Andrew, technical director for Taylor Wimpey West Scotland, said: “We are delighted to confirm that we have completed our land transaction for the former Hermitage Academy site on Cardross Road with Argyll and Bute Local Council, which will allow us to build our first development in Helensburgh.

“We hope to begin pre-construction works within the next few weeks and naturally we will keep the local community informed of our planned site start that will mark the first milestone of this exciting development.

“We’re really looking forward to bringing forward a development that offers buyers a great choice of new family homes in range of sizes and styles to appeal to a broad range of buyers. Securing this development marks our ongoing commitment, investment and strong track record of delivering excellent quality developments of family homes right across the west of Scotland.”

Help to Buy disproportionately helping larger housebuilders, analysis reveals

Building Professional Employee Builder Worker stockCritics of the Scottish Help to Buy scheme have called for the policy to be scrapped after an investigation revealed just three high volume housebuilders have received around £189 million in subsidised mortgages between them.

Freedom of information (FOI) data obtained by investigatory journalism platform The Ferret has shown that Persimmon Homes, Taylor Wimpey and Barratt have been the largest beneficiaries of Help to Buy since its inception, selling thousands of homes and building nearly half of the homes under the scheme.

The Help to Buy (Scotland) scheme allows people to purchase a new-build home without the need for a large deposit. It enables the Scottish Government to subsidise the cost of home-buyers’ mortgages with prospective buyers getting up to 15% of the purchase price of a new home.

According to The Ferret, York-based Persimmon Homes has benefited most from the scheme. It has sold 2,308 homes via Help to Buy – accounting for nearly one fifth of all the homes sold through the Scottish programme.

Based on the average equity stake per home provided by the Scottish Government, The Ferret estimates that the Scottish Government has put around £77.4m into the purchase of Persimmon built homes.

London-based Taylor Wimpey has received an estimated £57m worth of mortgage support, while BDW Trading, which is part of Leicester-based Barratt Homes, has benefited from around £54.8m worth of subsidised loans.

Courtesy of The Ferret

Courtesy of The Ferret

In early 2016, the Scottish Government announced it would ring-fence one third of its Help to Buy funding for smaller developers.

But the figures show that in the 2016 – 2017 financial year, Persimmon, Taylor Wimpey and Barrat built 52% of the homes supported by the scheme. So far in the current financial year, these three firms have accounted for 50% of the 1,264 homes which received Scottish Government subsidy.

Green MSP Andy Wightman, who also chairs the cross-party group on housing at the Scottish Parliament, urged the Scottish Government to end the scheme in the next budget, claiming it makes housing more expensive for everyone else by pushing up prices generally and does little to benefit those on low incomes.

He told The Ferret: “For too long now, boosting profits for senior management and shareholders has taken precedent over delivering homes that can properly be called affordable. Housing policy should focus on the supply side rather than demand.”

Graeme Brown, director of Shelter Scotland, said that the money would be better spent on supporting affordable housing for social rent.

“Help to Buy is not the right way of addressing the housing crisis. It adds public money into the market rather than lowering prices for everyone,” he added.

Directing resources to increasing the supply of affordable housing for social rent, he argued, “would reduce the threat of homelessness to many people who are currently struggling to keep a roof over the heads due to a combination of high rent, stagnant wages and welfare reform”.

Nicola Barclay, chief executive of Homes for Scotland, emphasised to The Ferret that taxpayers were likely to get their money back over the long term, and could even profit, provided house prices rise, as the loans were repaid.

She said: “With housing completions still 36% down on pre-recession levels, Help to Buy has played a hugely important role in sustaining the construction of new homes, supporting tens of thousands of jobs and contributing £1bn in Gross Value Added to the wider economy since launch.”

The Scottish Government announced last year that Help to Buy enabed more than 30 households a week to purchase a new build home

The Scottish Government announced last year that Help to Buy enabed more than 30 households a week to purchase a new build home

Housing minister Kevin Stewart said that the Scottish Government was investing £3bn in building 50,000 affordable homes and that the Help To Buy scheme was in addition to this.

He told The Ferret: “We are committed to help struggling buyers purchase their own home through our shared equity schemes.

“Over 10,000 households have benefited from our Help to Buy programme since its introduction – two thirds of these were first time buyers and three quarters were aged 35 or under. The evidence also shows the scheme has had success in helping people move from social housing and from waiting lists into sustainable home ownership.

“Shared equity support is provided directly to buyers and builders receive no support from the Scottish Government. Help to Buy is led by demand from buyers and the Scottish Government has no control over the number of developments made available by each builder or where these developments are located.”

Responding to the report, the Common Weal think-tank has went further and challenged the Scottish Government to “answer a number of questions about its closeness to the property developer lobby in Scotland”.

Other revelations in The Ferret included evidence that the Scottish Government has asked industry representatives to come up with evidence that will justify continuing the subsidy scheme.

The FoI’s also show that Homes for Scotland (HfS) rejected the idea of a small developers fund to replace the current Help to Buy scheme.

Commenting on the findings, Common Weal head of policy, Ben Wray, stated: “These revelations open up serious questions about just how closely the Scottish Government and the property developer lobby are when it comes to designing housing policy.

“It’s perfectly reasonable that Homes for Scotland is listened to, but the Scottish Government appear to be reliant on the lobbyist for evidence to justify policy which its most wealthy members benefit from directly. The fact that HfS are direct partners in devising the new build-to-rent subsidy raises further alarm bells about the closeness of this relationship.

“The Ferret FoI revelations also show that HfS has specifically rejected a small housebuilder fund to replace the current help-to-buy, which the evidence shows is a cash cow for a few big corporate developers. HfS do not represent all opinion on housebuilding and all housebuilders in Scotland, and the Scottish Government would do well to remember this.

“Common Weal will be watching the Budget closely next week to see if subsidies for big corporate property developers are maintained, or if full funding commitment is put into building public rental housing.”

Nicola Barclay has since taken to Twitter to clarify that Homes for Scotland represents all developers and “supports an all tenure approach to give everyone the chance of a home”.

Edinburgh gives green light for 149 new homes in Candlemaker’s Park

Location map_TheDrum_Edinburgh_webTaylor Wimpey East Scotland has gained a detailed planning consent from the City of Edinburgh Council to build 149 new homes on land off Candlemaker’s Park in the Gilmerton area of the city.

The 15.8 acre site is a brownfield site on the south edge of Edinburgh that is already identified for housing in the adopted Edinburgh Local Plan, next to the Drum Estate.

As part of the Section 75 agreement associated with the planning permission, there will be a provision of 25% affordable homes as well as contributions towards local education capacity and transport improvements.

Housebuilders look to sustain growth at annual Fife forum

(from left) Pam Ewen, Ian Drummond, Mark McEwen, Nicola Barclay, Cllr Altany Craik, Gordon Nelson, John Mills and Hugh Hall

(from left) Pam Ewen, Ian Drummond, Mark McEwen, Nicola Barclay, Cllr Altany Craik, Gordon Nelson, John Mills and Hugh Hall

Lochgelly, last year’s winner of Scotland’s Most Improved Town, was the venue of the 11th Fife House Builders Forum this week.

Over 70 delegates from across the house building industry came together at the Lochgelly Centre on Monday 13th November to discuss the recent upturn in the house building industry in Fife and debate how this growth can be nurtured and sustained.

The event, “Sustaining the Growth”, was organised by Fife Council’s Economy, Planning and Employability Service.

A packed audience was presented with a packed programme with Hazel Cross (economic advisor, Town Centre Development Unit, Fife Council) showcasing Lochgelly’s journey to becoming Scotland’s Most Improved Town; Gordon Nelson (director, Federation of Master Builders Scotland) speaking on the importance of the small and medium sized builders to the diversity and supply of new housing; Ian Drummond (managing director, Taylor Wimpey East Scotland) addressing the opportunities and blockers in maintaining housing growth; Nicola Barclay (chief executive, Homes for Scotland) emphasising the need for change, challenge and collaboration in smoothing the path to increased housing delivery; Mark McEwen (general manager, Customer Service, Scottish Water) explaining how infrastructure to enable development was being put in place; Pam Ewen (senior manager, Planning, Fife Council) highlighting the importance of the housing building industry to achieving £3 billion investment in strategic growth within Fife; Hugh Hall (principal, Fife College) tailoring the training offered by Fife College to the future needs of the construction industry; and John Mills (head of housing services, Fife Council) showing that affordable housing is key to the reduction of poverty in Fife.

Nicola Barclay, chief executive of Homes for Scotland, said: “I was delighted to have the opportunity to address the House Builders Forum, particularly in light of the ongoing collaboration between Homes for Scotland and Fife Council to support the delivery of more homes of all tenures across Fife.  The key themes of change, challenge and collaboration that I highlighted in my speech must remain the focus for Fife and all other authorities if we are to strengthen trust and resolve to work together to deliver more homes.”

The Forum was chaired by Councillor Altany Craik (convenor, economy, tourism, strategic planning and transportation committee, Fife Council) who added: “It is pleasing to see the commitment of all parts of the development community to delivering investment, skills, jobs and, above all, houses for the people of Fife. The prospects for further growth in the house building sector are good and Fife Council will work with the industry to sustain and increase this growth. Central to this is the highly successful Affordable Housing Programme and the council’s continuing drive to build on the previous success of 2,700 affordable homes already on the ground.”

Further growth on the horizon for Taylor Wimpey

Pete Redfern

Pete Redfern

Taylor Wimpey has delivered a confident trading statement for the second half of its financial year with sales growing and further growth expected next year.

The housebuilder said today 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 said that customer demand in recent months had particularly been supported by healthy employment trends, a competitive mortgage market and the UK government’s help-to-buy scheme.

It said that sales rates for 2017 so far were strong, at 0.81 sales per outlet per week, compared to 0.75 during the same period last year. Cancellation rates for the year are flat on 2016 levels, at 13%.

It did, however, reiterate that build costs are expected to increase slightly – by around 3 to 4 per cent – this year, with the pressure coming from labour costs and a modest level of cost inflation in building materials.

It said that net cash at the end of December is expected to be around £500 million after dividend payments of around £450m to shareholders.

Investment in Dumbarton’s Lomondgate regeneration project tops £100m

An aerial view of Lomondgate

An aerial view of Lomondgate

A project launched 10 years ago to regenerate the former J+B whisky bottling plant at Dumbarton has created 718 full-time equivalent (FTE) jobs and £365 million for the region’s economy, according to a new independent economic impact assessment.

A review by consultants Peter Brett Associates has revealed that 757 people now work at Lomondgate – the regeneration and development project being delivered by Strathleven Regeneration CIC and Walker Group (Scotland) Ltd.

And private sector investment has now topped £100m, smashing the £60m target set in 2007.

According to the report, Lomondgate businesses – Aggreko, BBC Scotland, Euro Garages, Jaconelli’s and Whitbread – and housing developers have invested a total of £106m including £47.9m invested in building 344 new homes by three developers – Walker Group, Persimmon Homes and Taylor Wimpey.

Lomondgate has also created the equivalent of 82 construction jobs, on top of the 718 identified in the study.

Key developments that have taken place at the 120-acre Lomondgate site over the 2016/2017 year, which have contributed to its continued success, include:

  • Whitbread Group plc almost doubled the size of its Premier Inn (already one of its best performing hotels in the region) by 54 rooms to 114 rooms, a vote of confidence in the location.
  • Taylor Wimpey received planning permission and acquired additional land to build a further 58 houses at Lomondgate. Groundworks have commenced and the new homes will be built over the coming two years.
  • Traffic count and visitor surveys were undertaken in 2016 from which it has been independently estimated that Lomondgate Services is now attracting more than 740,000 vehicles and 1.7 million visitors per year.

Commenting on the report’s findings, Strathleven Regeneration’s chairman, Bruce Malcolm, said: “These results – which have been achieved in challenging conditions and without public funding – show that Lomondgate has progressed from a regeneration initiative to become a vibrant community, successful business location and natural gateway to Loch Lomond & the Trossachs National Park.

“Securing over £100m of investment in such difficult conditions is testament to the effectiveness of our partnership with Walker Group and the strength of the location.”

Local MSP Jackie Baillie said: “Lomondgate is one of Scotland’s most ambitious regeneration projects and this report confirms that it is a real success story. Creating new jobs and good-quality housing are crucial to getting our economy back on track and promoting Dumbarton as a fantastic place to live and work.

“Hundreds more people now work at Lomondgate compared to when the J&B plant closed in 2000 and the development has attracted a number of world-leading businesses, including Aggreko and the BBC. I hope that even more companies will see the huge potential of the site’s location as the Gateway to Loch Lomond on one of the country’s most important trunk roads.”

Leader of West Dunbartonshire Council Jonathan McColl added: “These figures represent incredible success at Lomondgate, with initial targets surpassed and investment continuing to pour in. This Council is determined to show businesses big and small that West Dunbartonshire is a place where they can be confident locating their operations. We are well positioned close to vital links to major road, air, rail and sea transport networks and we are very much open for businesses.”

The release of the study follows the news that the BBC is partnering with the Scottish Government to launch a hub of the National Film and Television School (NFTS) at BBC Scotland’s studios at Pacific Quay, Glasgow, and Dumbarton. The organisation’s hit soap opera River City is filmed at Lomondgate and celebrated its 15th anniversary last month.

And just last month Chivas Brothers was granted planning permission to build a new bottling plant at its Kilmalid site – adjacent to Lomondgate – as part of a £40m investment.

Community benefits agreed for new Maidenhill development

CGI - MaidenhillDevelopers behind plans for a new community in Maidenhill, Newton Mearns, are to provide multiple pockets of land to facilitate the delivery of affordable housing as part of a range of newly agreed community benefits.

The framework outlining the additional requirements for the development of 834 new homes – between CALA Homes (West) and Taylor Wimpey West Scotland – has been confirmed with East Renfrewshire Council and early works activity is now under way.

The agreement will ensure the sensitive creation of the brand new neighbourhood, which the developers say is set to bring significant investment, and the creation of local jobs, to the area.

Other community benefits to be agreed for the Maidenhill project include:

  • The creation of a range of properties from one-bedroom flats to five-bedroom detached homes.
  • Land and funding to facilitate the construction of Maidenhill Primary – a brand new non-denominational school offering 444 primary school places as well as 120 nursery places.
  • A multi-use games area (MUGA) and 3G pitch within the school, and available for use by the wider community.
  • Generous public open space throughout the development – equivalent to around 19 football pitches – including a linear green corridor and host of pocket parks.
  • A contribution towards local community halls, sports grounds, sports halls and centres, libraries and community health and care provision.
  • Contribution of land towards a community faith facility.
  • Additional contributions towards off-site road improvements at Mearns Cross and sustainable transport.

Managing director of Taylor Wimpey West Scotland, Willie Burns, said: “Reaching the conclusion of this agreement for Maidenhill marks another milestone on the journey towards creating a fantastic new community that will complement and become an extension to Newton Mearns’ existing neighbourhoods.

“We’ll be working closely with East Renfrewshire Council and the local community to ensure Newton Mearns reaps the benefits of our long-term investment in the area.”

Jim McIntyre, managing director of CALA Homes (West), added: “We take our responsibility to improve the local community seriously, and this is evident in our plans for Maidenhill. As well as retaining plenty of open green space and creating new homes designed in to the landscape, we are also providing land for much needed affordable housing, and land for a new on-site school – with additional investment planned for local infrastructure and facilities as the development progresses.”

East Renfrewshire Council leader, Tony Buchanan, said: “I am delighted that this development will deliver such fantastic benefits for the wider community. The MUGA and 3G pitch will be available for use by all our residents, which will be a fantastic facility for sport and recreation. It is also important that the site will deliver a mixture of private and affordable homes to meet the needs of the area.”

Stirling housing developments refused over education contributions

Taylor Wimpey’s plans included public open space at Berryhills in Cowie

Taylor Wimpey’s plans included public open space at Berryhills in Cowie

Stirling Council has refused planning applications for two adjoining housing proposals for up to 500 houses on a site at the western edge of Cowie.

Although the sites are allocated in the adopted Local Development Plan, agreement could not be reached with the proposed developers to provide education contributions in line with adopted education contributions which are outlined in the Supplementary Guidance.

It was deemed by the council’s Planning and Regulation Panel that the developments would not provide fair and reasonable contributions proportionate to the scale and nature of the developments with regards to contributions to school capacities.

Planning and Regulation Panel chair, Councillor Alasdair MacPherson, said: “It is very clear that Planning Panel members were not convinced by the cases made by the applicants’ agents and unanimously supported the officer recommendations to refuse both applications.”

The applications were initially brought before the Planning and Regulation Panel meeting on April 13, where the decision was deferred pending a site visit and a hearing.

Previous consultations focussed on the suitability of the houses for the community, the impact they could have on access to affordable housing and the affect they would have on schools and roads in the area.

Developers Taylor Wimpey said they will “carefully consider” how it can progress the development in the future.

Pauline Mills, land and planning director for Taylor Wimpey East Scotland, said: “We are disappointed to learn that our planning permission in principle application for up to 433 new homes as part of our masterplan vision for land at Berryhills, Cowie has been unsuccessful.

“As well as new homes, our proposals included plans for a nature park, formal public open spaces, community areas and links to the existing community of Cowie. Our applications to Stirling Council followed an extensive public consultation process where we took the opportunity to positively engage with the local community and other key stakeholders as we developed our proposals for our emerging scheme.

“Berryhills was allocated for new housing in Stirling Council’s Local Development Plan which was adopted in September 2014, and therefore we will carefully consider our next steps in order to understand how we might deliver a masterplan that we believe will bring positive benefits to the local area.”