Taylor Wimpey: fall in property prices is disaster for housebuilders

Taylor Wimpey, the UK’s largest housebuilder, has warned that the fall in property prices is turning into a disaster for housebuilders.

The group, which was formed by the merger of Taylor Woodrow and George Wimpey last July, said it is being hit by a 26% collapse in business - a much sharper fall than estimated at its last market update six weeks ago.

The housebuilder is blaming the banks and building societies’ withdrawal of cheap mortgages.

Shares in the company fell 7¾p to 157¼p. It was recently demoted rom the FTSE 100.

At its AGM, chief executive Peter Redfern told shareholders that market conditions in the UK have weakened since we reported our preliminary results, with first-time buyers and investors facing particular difficulties as a result of the increasingly restricted availability of mortgages.

Talking about the group’s American and Spanish businesses, Mr Redfern said the company will need to take further US write-downs in addition to the £283 million taken last year, adding that housing markets in mainland Spain remain poor.

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