By Anita Likus
Of DOW JONES NEWSWIRES
LONDON -(Dow Jones)- The U.K.'s largest house builder Taylor Wimpey PLC (TW.LN) will buy less land than it will use next year as the market remains slow, said Chief Executive Pete Redfern.
The chief executive told Dow Jones Newswires in an interview that, while the market is slowly picking up, vendors are still reluctant to put their land on the market at such low prices.
"On average, land is some 50% cheaper from its peak," he said. Taylor Wimpey has approved new land purchase commitments for 1,011 plots at eight new sites since the half year and Redfern said that he buys land at more than a 50% discount because he is selective.
"We are in open discussions with U.K. banks to buy land," said Redfern "but it is still early days." U.K. banks own a lot of commercial and residential property and land, with Lloyds Banking Group PLC (LLOY.LN) one of the U.K.'s largest land owner.
Rival house builders Bellway PLC (BWY.LN) and Barratt Developments PLC (BDEV.LN) are also talking to Lloyds.
Taylor Wimpey earlier Wednesday cut its debt by about GBP1 billion through a rights issue and cash generation and increased its guidance on further debt reduction, expecting it to be some GBP100 million lower than previously.
Some GBP500 million of the reduction was achieved through cash generations, with a further GBP50 million to GBP100 million expected in the next two months.
Redfern said that he will not put as much cash into debt reduction next year, as some of the cash generated will be used to buy land.
-By Anita Likus, Dow Jones Newswires; +44 20 7842 9407; anita.likus@dowjones.com