Taylor Wimpey’s share price is in a poor shape this year because of several reasons:
- A persistent rise in borrowing cost – eg, mortgage costs rising at an accelerating rate
- A spike in Inflation – which erodes the purchasing power of buyers
- Economic uncertainty – arising from the war in Ukraine
- Surging energy cost – creating a ‘cost-of-living’ crisis
Against this backdrop, it is not surprising to see house prices fall back. In today’s trading update, even the firm has admitted that sales and conversion rates are up, while the cancellation rate is down (“cancellation rate for the second half of the year to date was 24% (2021: 14%), with a year to date cancellation rate of 18% (2021:14%)).“
Taylor Wimpey share price (LON:TW) maybe worth a buy if it falls a little lower
The Taylor Wimpey share price (LON:TW) has had a rough ride over the past five years, it is down nearly 50% despite property being one of the cornerstones of the UK economy. The asset is so deeply entrenched in the social psyche of the nation that buying a house is often referred to as ‘climbing the housing ladder’. Against the backdrop of a secular rise in house prices, you can see why.
Source: Morningstar
The average UK house price now stands above £290,000. This is near the record high. While prices have retraced somewhat in October, the current house price level is still far above the lows recorded just two years ago. No wonder many had put their hard-earned money in bricks-and-mortar.
Jackson is a core part of the editorial team at GoodMoneyGuide.com.
With over 15 years industry experience as a financial analyst, he brings a wealth of knowledge and expertise to our content and readers.
Previously Jackson was the director of Stockcube Research as Head of Investors Intelligence. This pivotal role involved providing market timing advice and research to some of the world’s largest institutions and hedge funds.
Jackson brings a huge amount of expertise in areas as diverse as global macroeconomic investment strategy, statistical backtesting, asset allocation, and cross-asset research.
Jackson has a PhD in Finance from Durham University and has authored nearly 200 articles for GoodMoneyGuide.com.
