Housebuilding stocks traded higher as restrictions on the property market were lifted.
Coinciding with the shift in guidance, allowing estate agents to open and home viewings to take place, Taylor Wimpey (TW.), up 1.5% to 148p, has announced plans to open up show homes and site offices from 22 May as it progresses beyond a phased return to sites which began at the beginning of May.
Elsewhere Crest Nicholson (CRST) advanced 3.7% to 237.4p as it unveiled its own return to work plans, activity remobilising from 18 May.
Taylor Wimpey has already returned to construction on the majority of its sites across England and Wales.
‘Housing market conditions have remained stable with signs of increased sales activity and customer interest since the re-start of site activities,’ Taylor Wimpey said.
Cancellation rates had fallen and the company’s order book had continued to grow. During the lockdown period, it sold 408 homes net of cancellations, averaging a net private sales rate of 0.30 homes per outlet per week. Cancellation rates averaged 27% for the period and represented 2.5% of the private order book.
RESILIENT HOUSING MARKET
The total order book as at the weekend ended 10 May had increased to 11,033 homes, up from 10,489 on-year, with a value of £2.7bn, up from £2.5bn.
Sales offices and show homes would initially be opened only for pre-booked appointments and with strict social distancing measures in place.
‘This decision means we expect to recall the majority of our sales staff from furlough by 18 May and most other staff by the end of the month,’ the company said.
AJ Bell investment director Russ Mould says: ‘It isn’t a surprise to see Taylor Wimpey’s actions coincide with a defrosting of the wider property market, in England at least, as estate agents are given the green light to open, viewings are permitted and working hours for construction businesses are relaxed to support social distancing.
‘The next question will be whether people feel confident enough to buy and sell homes in the current uncertain environment.
‘The fact several builders managed to complete transactions and take reservations through the lockdown suggests an impressive degree of resilience in the housing market.’
