Taylor Wimpey sees strong trading in Yorkshire but profits are hit by leasehold scandal
House builder Taylor Wimpey said trading in Yorkshire has been very positive, due to the favourable UK housing market fundamentals and customer confidence.
The company said that, in the first half of 2017, total home completions in Yorkshire increased by 14.1 per cent to 955. The total average selling price in Yorkshire for the period remained flat at £229,000, Taylor Wimpey said.
However, profits at Taylor Wimpey fell after it set aside £130m to help customers hit by the leasehold scandal.
The FTSE 100 company saw pre-tax profits plunge 23.7 per cent to £205m in the six months to July 2, despite recording an 18.5 per cent jump in revenues to £1.7bn from £1.4bn a year earlier.
Earnings were knocked by a £130m provision meant to help customers trapped in onerous leasehold contracts drawn up by the housebuilder.
Those provisions were announced back in April and were released alongside an apology for the “unintended financial consequence and concern” for what MPs have dubbed the “PPI of the housebuilding industry”.
Leaseholders were forced to stomach ground rents that doubled every 10 years and the freeholds to their houses were able to be sold to third-party private firms, making many homes unsaleable.
Taylor Wimpey said it expects the payments to customers to be “spread over a number of years”.
When stripping out the leasehold provision, Taylor Wimpey said pre-tax profits rose 25.7 per cent to £335m.