REG - Taylor Wimpey PLC - Full Year Results <Origin Href="QuoteRef">TW.L</Origin> - Part 2
01/03/2016 07:11
- Part 2: For the preceding part double click ID:nRSA5453Qa
increasing, but slowly.The Housing & Planning Bill was presented to Parliament in the Autumn and is
closely linked to many of the initiatives announced in the Chancellor's Autumn Statement and Spending
Review. These aim to address the disparity between the demand and supply for housing in the UK, by
seeking changes to the planning system and signalling potential financial considerations for some
sections of our customer base. The position is dynamic as a number of elements, particularly around
the Starter Homes initiative, are still to be fully defined which, as they are clarified and embedded,
could have a disruptive effect on the planning system, sales rates, site mixes and customer
behaviour.Responsibility· Land Director· Regional Managing Directors
Impact of market environment on mortgage availability and demandMortgage availability and The majority of the homes that we build are sold to individual purchasers who take on mortgages to finance their purchases. A change in business confidence, employment opportunities or significant changes in the base rate may impact on the demand for housing.In particular, the ability for first time buyers and investors to purchase homes is impacted by changes in mortgage availability at the higher loan-to-value levels, as it would impact on the level of deposits required. • A reduction in demand for new homes below normal levels could negatively impact on both profit and cash generation. This would have an adverse effect on return on net operating assets and net debt. Our local teams select the locations and home designs that best meet the needs of the local community and customer demand in the present and future. We evaluate new outlet openings on the basis of local market conditions and regularly review the pricing and incentives that we offer.We work closely with the financial services industry to ensure customers receive good advice on the procurement of mortgage products. We offer the Government- backed Help to Buy scheme and have seen strong interest in the scheme amongst our customers.Throughout 2015 we have continued to develop good working relationships with established mainstream lenders and those wishing to increase volume within the new build market.
affordability constrain the demand for housing. Following the Mortgage Market Review in 2014, stricter
guidelines were introduced for lenders to assess mortgage affordability. In 2015, the Bank of
England's Financial Policy Committee gained new powers, to set loan-to-value and debt-to-income limits
for residential mortgages.The Government has extended the Help to Buy equity loan to 2021, although
there is uncertainty over the impact when the scheme ends.Responsibility· UK Sales and Marketing
Director· Regional Sales and Marketing Directors
Material costs and availability of subcontractorsA continued increase in housing production may In order to optimise our build cost efficiency, whilst retaining the flexibility to commence work on new sites as planning consents allow, the vast majority of work carried out on site is performed by subcontractors.Without the introduction of new resources into the housing market, labour and material prices could increase. · If the availability of subcontractors or materials is insufficient to meet demand, this could lead to increased build times and costs, thereby reducing profitability.• Lack of skilled subcontractors could also result in higher levels of waste being produced from our sites and lower build quality. We maintain regular contact with suppliers and negotiate contract volume, pricing and duration as appropriate. We provide both high-level and site specific programme information to aid with demand planning.Competencies are considered as part of our subcontractor selection process, particularly in relation to health and safety, quality, previous performance and financial stability.We work to address the skills shortage with apprenticeship schemes and the Construction Industry Training Board. Following the recent growth in housebuilding, availability and cost of materials has stabilised and meets current demand. The supply of quality subcontractors remains challenging. The Group has agreed product lines and volumes with key suppliers to mitigate long lead times and shortages.
further reduce the availability of materials and subcontractors, and put pressure on utility firms to
keep up with the pace of installation. This results in build programme and completion delays and an
unexpected increase in costs.Responsibility· Head of Procurement• Regional Commercial Directors
Ability to attract and retain high-calibre employeesRecruiting employees with inadequate skills or in Our value cycle requires significant input from skilled people to deliver quality homes and communities for our customers.There remains an increasing incidence of 'poaching' in the housebuilding market. The demand for high-quality trained and experienced employees has increased and is key to achieving our strategic goals.
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