Bloomberg News

Taylor Wimpey U.K. Home Sales Fell Amid Restricted Lending

June 30, 2011

(Updates with CEO comments starting in third paragraph.)

June 30 (Bloomberg) -- Taylor Wimpey Plc, Britain’s second- largest homebuilder by volume, said first-half home sales in the U.K. fell by 5 percent as banks restricted mortgage lending.

The London-based company said it sold about 4,550 homes in the six months through June 30 compared with 4,804 a year earlier. Average prices rose to about 170,000 pounds ($274,000) from 168,000 pounds. The order book accounts for 79 percent of the company’s annual sales target, Taylor Wimpey said in a statement today.

There have been “small incremental improvements” in mortgage lending, Chief Executive Officer Peter Redfern said on a conference call. “We don’t expect to see a massive sea change either positive or negative, but there are things that are moving it slowly in the right direction, like first-buy direct.”

Homebuilders will help first-time buyers get less expensive mortgages through first-buy direct, a state-backed, 500-million pound plan to lower down-payments to about 5 percent of a home’s value. Taylor Wimpey plans to offer 1,200 homes through the government plan.

“We don’t see it as a universal panacea,” Redfern said. “Do they in isolation resolve any issues in the mortgage market and kick the housing market off in a positive direction? No, they’re not designed to.”

Britain faces a housing shortage of about 1 million homes by 2015, with London affected the worst, according to Savills Plc, a London-based property broker.

Mortgage advances fell 10 percent to 33 billion pounds in the first quarter from three months earlier, the Financial Services Authority said June 21. U.K. house prices fell for a second month in June as the growth in the supply of properties for sale outpaced demand, according to Hometrack Ltd., a London- based property researcher.

--Editors: Jeffrey St.Onge, Andrew Blackman

To contact the reporter on this story: Chris Spillane in London at cspillane3@bloomberg.net.

To contact the editor responsible for this story: Andrew Blackman at ablackman@bloomberg.net.


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