Developer Taylor Wimpey profits plunge nearly a quarter
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Taylor Wimpey, the developer behind Regent Canalside and Regency Mews on Camden Road, has seen profits fall by 24 per cent as leasehold payouts dent confidence
Pre-tax profits at Taylor Wimpey have fallen 23.7 per cent to £205 million in the six months to July according to the Press Association. The FTSE 100 developer was hit by £130 million set aside to alleviate some of the burden of unscrupulous leasehold contracts drawn up by the company.
Taylor Wimpey was behind the 2014 redevelopment of Regent Canalside and Regency Mews on Camden Road, with 41 were private homes and 13 ‘affordable’ properties.
Despite a rise in the number of homes in its pipeline, the value of those homes fell 2.1 per cent. In the capital, just 261 homes made the order book, down from 407 in 2016, slicing £158 million off their value.
The news comes as Foxtons and Countrywide saw profits tumble 64 and 98 per cent respectively in the first half of 2017, with accounts and advisory firm Moore Stephens reporting on 31 July that 19 per cent, or one in five, estate agents in the UK are at risk of going insolvent.
In April Taylor Wimpey allocated £130 million to repay customers battling skyrocketing ground rents on their leasehold properties, with the freeholds owned by third-party companies.
Just last week Sajid Javid, Secretary of State for the department of communities and local government announced a consultation paper aiming to ban leasehold tenures on new build properties and scale back ground rents.
A Taylor Wimpey spokesperson commented: “The process of negotiation with the owners of the freeholds to these leasehold properties is on-going, and is proceeding in line with our expectations, and we continue to keep customers updated on the progress of these discussions.”
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Despite declining profits, the builder claims it is holding strong in the face of Brexit and the UK election, claiming pre-tax profits rose 25.7 per cent in the first two quarters when the leasehold provision was ignored. The company recorded revenues of £1.7 billion this year, an 18.5 per cent jump since 2016. 6,580 homes were completed, a rise of 9.3 per cent, with selling prices up 6.3 per cent to £253,000 on average.
Pete Redfern, CEO asserted: “Although the wider political backdrop could have an impact on confidence levels and market dynamics, we have seen no material change in trading since the General Election, and our first-half performance has been strong.”
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Taylor Wimpey is also behind Millbrook Park in NW7, offering homes starting at £426,000, Oakleigh Grove in Whetstone, starting at £735,000, and 106 new homes (15 of which are affordable) at Dalston Curve.