Wimpey warns of housing slow down
Wimpey, the house builder which is merging with Taylor Woodrow, today warned of ‘less buoyant market conditions’ in the second half of 2007 as rising interest rates continue to sap consumer confidence.
In a pre-close trading statement before its half year period end on 1 July, Wimpey said the UK housing market had remained stable for the first half of the year. It added that good buyer demand left it confident it would achieve operating margins of more than 14%, despite its predictions of a downturn.
However, the company reported a bleaker picture in the US market, which it described as ‘challenging’. Wimpey said buyer confidence was low because of concern about interest rates and the high level of housing available.
‘Due to market conditions, average sales prices on first half completions are expected to be significantly down on 2006 which will impact directly on margins,’ it said.
‘Volumes for the first half have been impacted by reduced order books coming into 2007 and weaker than normal sales and are expected to be around 20% below the high levels achieved in the first half of 2006.’
Wimpey said the US business had continued to focus on cost reduction initiatives and remained confident of achieving its target of $20m (£10m) in 2007.