Taylor Wimpey builds expectations and boosts dividend

Taylor Wimpey cheered the City on Tuesday as it pumped hundreds of millions more in dividends at investors and set out ambitions to become the UK’s biggest housebuilder.

The company will pay an extra £100 million in dividends every year as well as a special payout of £350 million next year under a new strategic plan unveiled by boss Pete Redfern.

Shares in the builder rose 4.6p, or more than 2%, to 199.7p.

Taylor Wimpey built around 15,000 homes last year but Redfern also wants to raise the firm’s capacity.

The chief executive refused to set a timeframe but said building 20,000 homes a year was a “realistic ambition”, potentially putting it ahead of major rivals Barratt Developments and Persimmon.

Easing constraints on land means the firm will run with a smaller land bank — increasing the available returns to investors — while it focuses on skills, the company added.

Wimpey, along with other builders, has benefited from the long-running Help to Buy subsidy, the future of which is uncertain beyond 2021.

Jefferies analyst Anthony Codling said: “The main risks to our estimates are a slowing down of the UK housing market, a reduction in mortgage availability and political risks surrounding Help to Buy.”