UK's Taylor Wimpey upbeat on 2024 housebuilding target
H1 pretax profit down 58% to 99.7 mln pounds
Shares of FTSE 100 firm hit over two-year high
Sees annual operating profit in line with market view
Updates shares in paragraph 2, adds context in paragraph 3, analyst in paragraph 7, CEO in paragraph 8
By Aby Jose Koilparambil
July 31 (Reuters) -Britain's Taylor Wimpey TW.L expects to build close to the upper end of its annual housebuilding target in 2024, it said on Wednesday, reflecting market expectations of a demand recovery as mortgage rates ease.
Shares in the FTSE 100-listed .FTSE housebuilder, which have risen about 8% so far in 2024, gained around 2% by 0935 GMT, hitting their highest level since January 2022.
Its positive housebuilding target chimes with policy set out this week by Britain's new Labour government, which wants to increase home construction to ease Britain's housing crisis.
British housebuilders have been betting on a near-term recovery in the sector, which has seen subdued demand for most of 2024, on easing mortgage rates and strong competition among lenders.
Many of the top UK lenders have lowered mortgage rates this month following cuts in early 2024, although a delay in the Bank of England's monetary policy loosening has interrupted continual reductions in home loan rates through the year.
Taylor Wimpey, which also posted a slump in half-year profits, said it now expects to build close to the upper end of its target range of between 9,500 and 10,000 homes in 2024 in the UK.
"The prospect of UK rate cuts boosting the housing market continues to be the driver for housebuilders, and the solid outlook for completions supports the view that demand will pick up again in the months to come," Chris Beauchamp, chief market analyst at online trading platform IG, said in a note.
Taylor Wimpey CEO Jennie Daly told analysts in a post-earnings call that the group is seeing good levels of customer interest and the quality of inquiries is good, although there is "definitely an affordability issue".
Group pretax profit fell 58% to 99.7 million pounds ($128 million) for the six-months ended June 30. It expects annual group operating profit in line with an average company-compiled estimate of 416 million.
Weekly net private sales rate for the four weeks ended July 28 stood at 0.64 units per outlet, compared with 0.47 homes a year earlier.
($1 = 0.7788 pounds)
Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Emelia Sithole-Matarise and David Holmes
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