Good morning, everybody, and thank you for joining us. There's quite a lot to get through, both in our statements, and I'm sure plenty going on in the sector, so plenty of questions. If I just stand back for a second and talk about the overall position, we obviously see this as a very reassuring statement, restating our performance for last year and setting out how the business is set up for 2022. I think if I stand back and look at last year as a whole, we're very pleased with the performance. You'll remember we upgraded pretty much every time we came back to the market during the first half of the year. Then, again, it's quite a difficult operational backdrop of build availability on materials and labor.
We delivered exactly what we said at the half year and set up the business very well for the future. Touching first of all on the housing market, it clearly was a very positive housing market last year. I think, you know, we were the first to be positive about the market and to stress the underlying strength, and we've seen that through to the end of 2021, through the Christmas period, where we've seen continued good interest from customers and a very healthy start to 2022. The business has a strong order book. It continues to be slightly above what we'd see as the long range level. It gives us plenty of choices as we look at the market going into, for this year.
Our overall sense is, although for the year as a whole, it might not be quite as strong as the, you know, sort of conditions we saw last year, the signals are still very positive, and we're certainly not seeing any sign of weakness at the moment. I think you've seen that, you know, sort of reported more broadly, both in our sector and in the wider sort of housing sector as a whole. I think, again, and I'm sure there'll be questions on regional variations and product variations. I think they are, you know, sort of not particularly significant. We continue to see a good market in all of our main operating geographies and across the full range of our products and our customer groups.
On the material side and the build side, that's clearly been the bigger challenge through 2021 for the whole of the sector, particularly material availability and price. As we set out through the course of the second half of last year, we expected to see the price gains that we made fully offset the cost impact and that we've been very pleased with the way our teams, both the regional and site teams, but also our central procurement and logistics functions have handled the availability challenges. You know, sort of we've seen a very good performance from the business, delivering exactly the volume that we've been, you know, sort of setting out for the whole of the course of the year. Going into 2022, we see some amelioration in the availability and pricing challenges on materials.
It's not across the board, so some areas are still pretty challenging. Very pleased with the way some of the strategic work we've done with our logistics function, which we'll spend more time on with the full year results, sort of have performed. I'm very pleased with the way our teams have had to work and have worked at a site level. I think set against that, particularly pleased that we continue to be a five-star builder, but also that our performance in the NHBC construction quality scores is the best in the volume industry. That's been a very key measure for us. We don't think that just customer surveys could give a good sense of the quality of how a business delivers cause customers can't always see quality issues.
Whereas if you look at both the customer quality scores and that NHBC quality score, you get a really good sense of overall performance. Very pleased with the rounded performance from our teams in some relatively challenging environments. I think as we go into this year, we don't see that having a material impact, those limitations having a material impact on 2022, but it will continue to be a challenge through the next few months, and our teams will continue to work hard. If we now move on to land and planning, you see in this calendar year the real impact of our early land investment, post the capital raise. Our net land on both strategic and short-term has increased, and the total of the two is about 14,000 plots.
We continue to expect both the, particularly the short-term land bank to increase as we get a full flow-through of the plots that we acquired in 2020 and the first half of 2021. We're in a more or less replacement phase on new input coming in today, but there's still some flow-through that we'll see that land bank continue to rise and remain very confident that that underpins the sort of growth aspirations for 2023 and beyond that we've talked about.
I think what should have been very clear to you over the course of the last six to eight months from the general sector reporting is that the land environment has tightened, but that more particularly the planning environment has been pretty challenging with low resource levels in local authorities and, you know, sort of some political steps away from, you know, sort of driving house building at a local level. We feel in a very strong position in that more difficult, challenging environment. Our early land investment means we have a bigger hopper of sites coming through.
As I know, Chris has stressed to many of you, although our outlets are at a level that we'd like to see grow, we currently have 120 sites with detailed, or outline permission owned and controlled that we're bringing through the planning system. That's what drives our confidence in the increase in outlet numbers that we set out that we expect to come through in the second half of 2022, setting us up for 2023. Moving on from the operating side of the business, some of the, you know, sort of broader customer and political issues. I'm talking first of all about cladding, which has obviously been a subject of intense debate over the course of the last week.
Just want to be very clear with what we set out a year ago, or nearly a year ago, and reiterate our sort of financial position, and just as importantly, our position on how we are dealing with our customers. We set out with our prelims that we, Taylor Wimpey, would pick up the costs of bringing any Taylor Wimpey building built in the last 20 years up to current standards. You know, we've used the EWS1 form to define those current standards. We made an estimate of what that cost would be. Just to be clear, that includes buildings that we own still and buildings that we do not. Includes buildings above 18 meters and buildings between 11 and 18 meters. The provision that we set out, you know, sort of at that point in time, was an additional GBP 125 million.
We still believe that's the right commitment. We think it's the right moral thing for the business to do and puts us in a strong position in conversations with government. We still think that is a very sound estimate of the cost of that work. We've been in ongoing dialogue with building owners and progressing both the plans and, in some instances, the work on those buildings. You know, continue to believe that we did the right thing at that point in time, and that we made the right financial estimates at that cost. Just very briefly wanted to touch on leasehold and CMA investigation. Just to say that it was pleasing to get that resolved with the CMA just before Christmas and hopefully draw a line under that particular issue.
Then the last thing I wanted to cover before I hand it over to Chris was the statement we've made on our share buyback. You know, I think you were all expecting from us some kind of capital return from 2022. We've, you know, sort of talked about that with investors, we talked about that with analysts. Since the capital raise that, you know, sort of 2022 will be the year that we returned to more significant capital return dividends. It is a key decision that the board took to sort of weigh that towards the share buyback. The exact quantum and the exact structure will depend on the conditions when we announce it finally with the prelims, but we just want to set out, you know, sort of our current expectation. Chris, over to you.
Thanks, Pete. I think it's important to note that, you know, the increases in both volume and operating margin drove strong cash generation in 2021. Although we ended the year with more cash than we originally guided to, we still spent over GBP 1 billion in cash on land in the year. I'm expecting lower land spend in 2022 as we migrate to a replacement basis. That to be offset by increased WIP investment as we grow our outlet position. Even so, we still expect to generate strong operating cash inflows in 2022. In terms of the balance sheet, you know, we're starting this year with over half a billion more land than this time last year, and about GBP 100 million less WIP. Our overall net assets of around GBP 4.3 billion.
If you apply our ordinary dividend policy of 7.5% of net assets, that alone would generate a dividend yield of getting towards 6% this calendar year based on Friday's closing price, subject of course to, shareholder approval. When you consider that together with the strength of the land bank, the pipeline of outlets it provides, what that means for volumes in 2023 and beyond, and the cash that the business will generate as a result, it's easy to see where our confidence in delivering sustained shareholder value comes from.
Thanks, Chris. Can we open up for questions please, Maxine?
Our first question comes from Brijesh Siya from HSBC. Your line is now open. Please go ahead.
Good morning, gents. I have two questions.
Morning, Brijesh.
Morning. So, on outlet growth. First off, you said around 37 new outlets open and by early November it was 67. If you could tell us what was the number for full year 2021, and your expectation for 2022 in terms of average outlet it would be, and what does that mean in terms of completion growth for 2022? The second question is on. Sorry. Okay, carry on.
No, no, carry on, Brijesh. I wasn't sure if that were your two questions or if you got. You carry on.
Sorry. I have another on the share buyback. Has the board kind of decided what kind of criteria they're going to look into when they kind of doing what amount of cash that will be used for the share buyback?
Okay, thank you. I'll leave Chris to pick up the first part of the outlook question on, you know, specific growth numbers. I think looking at 2022, you know, we've been very clear, you know, I think through, you know, sort of the course of last year that, and from the point of the capital raise, that the outlook growth was setting us up for 2023 completions rather than 2022. You know, we actually are in a strong position for our volume expectations and the volume guidance we've given you for 2022 from our existing outlets, and certainly from those that are, you know, sort of already have planning. You know, sort of we're not exposed in terms of volume risk in a meaningful way this year to that outlook growth.
You know, that's obviously consistent with the outlook growth coming in the latter part of the year, setting us up for next year. You know, I'm not gonna give you specific guidance. We expect, you know, sort of outlets to remain pretty stable through the next few months but then start to grow later in the year. When you look at our order book, and, you know, sort of where our outlets are when we look side by side, the kind of level of growth that we talked about for this year, which we have always said would be relatively low, you know, sort of, in the, you know, sort of, low single digits, we're in a good place of existing outlets to deliver that. It's the outlet growth through the course of the year to deliver completions for next year.
Chris, there is a couple of specifics on outlet numbers.
Obviously, the average outlets in 2021 were 225. We started this year with a few more at 228. I think I'm probably repeating what Pete said, but I'm expecting that to stay sort of pretty flat between now and the half year, because y ou know, the market's strong and so sales rates are likely to be reasonably strong too.
You know, we're continuing to make really good progress with the planning. We still expect to show that net growth in output in half two weighted towards the end of the year. I think, Rajesh, you might have been asking about you know, something we disclosed at the end of November, which was you know, the number of outputs that you know, we've sold out and therefore are not counted as outputs anymore. So not counted as outputs in the 2022 A so we had you know, 42 outputs that are sold out and in that status at the year end.
Yeah. Thank you.
Moving on to the share buyback question, Brijesh. I think, you know, I can answer part of the question, you know, sort of today, which is, you know, sort of how we will think about the quantum. I'm not gonna go into it in any detail. You know, if there are any supplementary questions I'll have to defer to the prelims. But I think, you know, sort of our take is the amount of capital that we see available is a similar sort of approach to how we have looked at our cash returns over the course of the last few years. You know, we look at our current land investment, our expectation of current sort of performance and near-term need for investment.
In an environment where, you know, we were expecting to grow the land bank, which is not, you know, materially where we'd expect to be, you know, as we go through this year, then we'd obviously set that aside. Looking at that near term investment, and that's what defines the amount of capital that we return. I think, you know, I would reiterate. I'm sure we will at the prelims reiterate the comments that we have made consistently over the last few years, that we believe that a house builder should have a strong balance sheet, both because of the underlying cyclical nature of the business and the opportunity, you know, to be sort of opportunistic with land. We expect there to be excess capital.
We expect that to be a normal part of the business delivery over the next few years, and we'll be returning it, but with a, you know, retaining a cautious balance sheet.
Okay. Understood. Thank you very much.
Thank you. Should we move on to the next questions?
Our next question comes from Aynsley Lammin from Investec. Your line is now open.
Thanks very much. Morning Pete, morning Chris. Just two questions from me, please. First of all, I wondered if you could give a bit more, you know, on what you expect for build cost inflation for 2022, and maybe drill a bit into kind of labor and materials within that. The second question, just on cladding. Can I just clarify, essentially what you're saying is, you know, even if the government pushes the whole GBP 4 billion repair bill that they've kind of tabled onto the developers only, the provision you've made, you're comfortable that that would cover all the repair works you would need to make within that GBP 4 billion if, you know, it doesn't, the kind of scope doesn't widen out to maybe material suppliers or contractors, for example? Thanks.
Thank you. On build cost inflation as I touched on the material side, we see some softening of the pressure, but it's still above normal levels. I think we all across the sector expect, you know, sort of some of the wage inflation we've seen in the wider economy to, you know, impact on the sector during this year. At gut feel, and I'd say it is a gut feel rather than formal guidance at this stage, but the 5% level that we saw in 2021 is a reasonable estimate of 2022. Obviously as we go through the next few months, we'll, you know, be getting new data to sort of firm that up and we'll tell you if it changes. We think that's a reasonable view sat here today.
Certainly, what we're seeing at the moment, both in terms of the carry forward sales price growth from last year that's in the order book and in current sales and the ongoing sales price growth, you know, means we're reasonably comfortable with the underlying guidance that we expect the sales price growth to offset that cost inflation. We're not flagging any change in our marketing guidance because of those two moving parts. On cladding, there are two very different things there. Yeah, we are very clear with the responsibility we believe we have to people who live in Taylor Wimpey buildings and, you know, so we believe our provision is, you know, right for those buildings.
I think in terms of any government wider effort, particularly tax driven, to recover further funds from the sector as a whole, you know, we will absolutely be arguing the point about the commitment we've made and that we are taking responsibility for any issues that relate to Taylor Wimpey. I think you will understand fully that, you know, sort of none of us really know where the GBP 4 billion number comes from, and therefore it's very hard for us to make a definitive commitment if government has a wider push. I think, you know, we all, I think, perfectly reasonably expect that government should be going back to the wider industry, but we all recognize the fact that house builders are large businesses that are public and very visible.
You know, it's not possible for me to make commitments about that, about any wider government initiative. All I can do is talk about the position we are in in relation to our buildings and yeah, we're making that argument strongly to government.
Great. All very clear. Thank you very much.
The next question comes from William Jones from Redburn. Please go ahead. Your line is now open.
Thanks. Morning, three if I could please. The first was just whether you'd be able to review what you perceive to be your like-for-like house price experience through last year, you know, January to December, on the private business and then any help for us this year, I suppose, in terms of mix effects, to bear in mind for the P&L. The second one was really just around, I guess, sales strategy this year. Obviously, you've got a long order book coming to the year, prices generally rising. The influence perhaps through the year of Help to Buy, cutoff points moving into sight. Just wondering, I guess, around that sales rate number, what the optimal approach is for 2022.
Just coming back to the balance sheet, I appreciate it's all to be decided ahead of the full-year results, but am I right in thinking in the past you have talked about modest adjusted gearing as something you'd be comfortable with when we think about, I guess, net cash left on creditors. Thank you.
Great. Thanks, Will. If I defer the last one to you, Chris, and I'll pick up the first two. On like for like house price growth, sort of, you know, from a stock point at the beginning of the year to the end, between 6%-7%, give or take. I think the number you see on the, you know, sort of P&L movement from 2020- 2021 will be slightly lower because there was a particularly big mix of, you know, larger products in the second half of 2020. You know, post lockdown, you saw that dynamic being more material. I'd say that's still there a little bit in 2021, but we expect to see it in 2022 as well.
To me, we've returned to what I would say is a normal mix through the course of this year, where, you know, with the larger product having been relatively suppressed through the early Brexit years and then almost bouncing back very strongly immediately post sort of the first lockdown. Now we're selling, as I would say it, more or less, our average product, you know, represents what's in our P&L for 2021. I wouldn't expect there to be a big mix shift from 2021- 2022. I think we're at a normal level. You know, sort of continued to see some price growth today.
Wouldn't give you a, you know, sort of, a formal forecast, but, you know, I think we'd be optimistic to think that it was the 6%-7% level, but I'd be very surprised if it's not more than the 2%-3% level unless the market changes materially due to some external factor, during the course of the year. On sales strategy, you're right. I mean, in an environment where, you know, sort of new outlets are a premium, sales are relatively straightforward to achieve and build is challenged, then, you know, I don't think it takes a genius to work out that our strategy will be weighted towards, price over volume and therefore price over sales rate. We'd be quite comfortable if the sales rate came down a little bit.
As I say, I still see our order book at the longer end of what we need and what is right. There is still that weather eye on Help to Buy and new sales from Help to Buy effectively coming to an end in the autumn. You know, sort of where we'll be pushing and to get the right price, making sure that, you know, sort of we make the most of the market conditions that are there, particularly with the cost inflation, are weighting towards price over volume, but wanting to keep a reasonably long order book by normal standards until we see how the Help to Buy exit actually performs.
Yeah. Thank you.
Chris, the balance sheet question.
Yeah. I think I've said before, well, you know, land creditors have sort of fixed maturities, you know, the majority falling due in the sort of short to medium term. You know, we don't see that it's sort of appropriate for them to finance land. Our approach is really to maintain adjusted gearing at low levels to maintain sort of resilience and financial strength as you go through the cycle.
Our next question comes from Christopher Millington from Numis. Your line is now open.
Thank you. Morning, Pete. Morning, Chris.
Hi, Chris.
Just ask the first one just on the profile of completions through FY 2021, particularly with regards to that Q4 weighting obviously you came at prior to the pandemic. Perhaps you could just comment how that's likely to evolve into 2022. The second one, you just sounded quite confident about your position on planning. I just wondered if you could elaborate a little bit further and maybe just give us a feel as to what the portion of plots you've got planning for versus your expectations this year. Then the final one's just on price versus cost.
Look, I appreciate you probably don't wanna go too far on this, but a lot of the commentary seems to be about an offsetting scenario, whereas the numbers you're painting there seem to, you know, point to quite a big margin tailwind. I mean, perhaps you could just comment if there's any sort of offsetting factors with regard to kind of the price versus cost dynamic and why it shouldn't feed through to that sort of margin growth we'd usually expect. That'd be great. Thank you.
Thanks. Thanks, Chris. I think I captured all of those. It's possible I might have to come back to you, but I think probably the second question will go to Chris, and he may have got the detail of that. I think on the 2021, you know, 2020, 2021 sort of balance through the year, we obviously don't want to get back to the sort of quarter four weighting we were back in 2019. We openly said that wasn't where we wanted to be and that, you know, we just had too much volume in that final quarter which put the business under pressure. But at the same time, 2021 was extremely the other way because we obviously had a big carry through of the quarter four plots that were delayed from 2020.
We had a very, very favorable first half, second half balance, and we would normally expect to see a bigger balance in the second year. I think you will see this year, you know, nothing like 2021 in terms of the first half, second half balance, but more normal than last year. You know, we'd expect first half volumes to probably be below last year and see the growth in the second half. I'll pick up the price cost tailwind, and let you know, sort of Chris picks up the sort of planning and outlook position and the sort of where we are for plots this year. I think in principle, you're right. We could see, you know, sort of a tailwind from that balance.
I think certainly if it's there, then tactically we want to take advantage of it. I think at the moment we're all, and I think quite rightly in the second half of this year as shown across the sector, you know, we were quite cautious in our first half guidance, you know, sort of, given because you couldn't tell how the cost and material dynamic was going to go. It put, you know, sort of, I think we were right to be because it let us run the year properly and that our teams delivered not just the volume that we were expecting, but the quality as well. What we don't want to do is put a lot of pressure on them.
There is some upside if that price cost balance materializes, but we're in a really uncertain environment still, particularly on the material side. You know, it's there, it's probably there in, you know, late this year, sort of and into next year, but it just doesn't feel responsible to call it out now when there's so many other pressures. We are seeing, you know, the changing regulations, you know, the cost of, you know, the new Part L & F coming in. We've got good estimates, but it still needs to be executed. In the balance, we think our guidance is in the right place. From the pure dynamic of the market, I think there's a bit of upside if, you know, sort of that comes through as we currently expect.
Yeah. Chris, I think you know, your outlook question was targeted at security of volume for 2022. As we sort of came into the year and looking forward at that point, you know, over 95% of this year's completions were on sites that we were already on. Actually, you know, very small percentage for this time of year of risk associated with outlet openings for this year's volumes.
Got you. That's very clear. Thank you, gentlemen.
Our next question comes from Rajesh Patki from JP Morgan. Rajesh, please go ahead. Your line is now open.
Yes, thank you. Good morning all. I've got two questions, please. The first one is on the cash position, which came in ahead of your expectations. Just to understand that better, apart from timing of land investment, I mean, is there any other moving part that you would like to highlight at this stage? Secondly, the mix of affordable units in the overall group completions was pretty low at 18%. Where do you see that ending up this year? Do you see the group ASP level holding despite this negative mix impact if the mix of affordable units goes up? Thank you.
Do you wanna take the cash one, Chris, or?
Do you want to take both? Yeah, I'm happy to.
Yeah.
Just on the cash, yes, I mean, the 20% improvement compared to guidance was due mainly to the land spend, but also to strong working capital management, and also the fact that it's sort of reasonably difficult to spend as much on WIP as we would like to, you know, due to the material and sort of labor availability. As I mentioned earlier, you know, we entered the year with WIP balance about GBP 100 million lighter than the end of last year. In terms of the affordable mix, I mean, we ended up, if you exclude JVs, we ended up at 17.6%, and actually we guided to 17%, so it's very consistent with our guidance.
Going forward, yes, we'd expect it to return to a sort of a more normal level around about the 20% mark for 2022. You're quite right in terms of, you know, blended selling prices, then obviously that will reduce and, you know, and therefore the year-on-year blended average selling price will be, you know, reasonably flat.
That's great. Thank you.
Our next question comes from Emily Biddulph from Credit Suisse. Your line is now open. Please go ahead.
Morning, guys. I hope you're well. I've got three questions, please. The first one's just on the So the k ind of what the ASP is in the private order book and sort of where the volume sits. Secondly, I just wanted to come back on Chris's comment on the cash demands for the business in the coming year.
I think you sort of effectively said land commitment from now on you'll be at replacement levels, but for the coming year, we should still assume that outflows on land are still higher than replacement levels. Relative to this year, the sort of WIP increase year on year will be higher and the land investment will be lower. Should we assume that the two effectively offset one another and the sort of increase on inventory be similar? Is it sort of fair to assume that it will still be less than it was in 2021? What other cash demands, I guess, are on the business that we should bear in mind? Where does the sort of fire safety provision sit and sort of what the reasonable assumption for cash outflow for that for the coming year? Thanks guys.
Thanks, Emily. I hope you are well too. Just on the land investment, if I can pick up one piece, because I may have sort of not been as clear as I should have been. When I said we're at more of a replacement level, I was talking about at the front end. The number of new land exercises, the number of new approvals that we're expecting is broadly balanced. We are still, you know, and as we always have been, expecting to see some growth in the land bank as the deals, we've done flow through, and that there'll continue to be some, you know, sort of cash outflow over and above normal land investment through the course of 2022.
You can see some of that in the elevated land credits and some of that in plots that are controlled. You know, my comment was more about the front end. I think it'll be the end of this year that we're at more of a balance sheet neutral position, which is always why, you know, our view would be we'd go back into, you know, having, you know, sort of a meaningful additional cash return this year, but it wouldn't be the full year, but next year, 2023 will be the first full year where we're back to full, you know, sort of balance between cash coming in and cash coming out. Chris, hopefully I've given the chance for you to pick up the specific on the order book selling price.
Oh, yes. I mean the selling prices in the order book and if you divide one by the other in the statement is up 1%. Emily, were you specifically asking about the private?
Just interested in the private component.
Yeah, yeah. That's at the 4.6% year-on-year. Just on the cash questions, Emily, you know, we will provide an update on the, you know, the various elements of the cash guidance at the prelims when, you know, when we announce the quantum on the excess capital returns.
Emily, if you take that sort of order book selling price, you know, sort of, and just think about, you know, our comment earlier that average selling price from January 2021- December 2021 went up 6% and 7%, but the mix at the end of 2020, you know, sort of, 2020 was particularly weighted towards larger plots and now it's more normalized. You know, that's where you get the, you know, 4.6% price uplift. You can sort of feel more or less what's going on there in the dynamic.
Thank you.
Thanks.
As a reminder, if you would like to ask a question, please press star followed by one on your telephone keypad now. Our next question comes from Gavin Jago from Barclays. Your line is now open.
Yeah, good morning. Thanks for taking my questions. Just a few if I could please. First one is just to back on the cladding situation and I guess Michael Gove's view to look back 30 years, and I guess what work have you done at these early stages to think what might fall into scope in terms of what was being built in the 1990s by I guess by George Wimpey and Taylor Woodrow. The second one is just around Deposit Unlock and just wonder if you've got any stats you can share around how much usage that has had in the regions where I guess the price caps under Help to Buy are quite restrictive for your product and where the Deposit Unlock has started to take up some of that slack.
The final is just on land creditors. I don't know if it's in the statement. I haven't seen it, I don't think. If you could just put a number on that at the year end, please.
Thanks. I'll leave the last one to Chris and I'll pick up the first two. It is still early to have gone back to 30 years. You know, we haven't done you know a full detailed exercise, but I think you know I think there are 2 or 3 areas of comfort that I can give you. We chose 20 years, you know, sort of because we felt it was the right length of time, not because there was a big weight of problems before that. In fact, to Chris and my knowledge, we've not had a single customer issue with a mortgage with an EWS1 form relating to a building prior to 2000. There was a reason why, you know, 20 years felt right.
When I go back and I joined the business around, you know, around 20 years ago, you know, sort of on the turn of the millennium. God, that makes me sound old. You know, sort of I go back before that, the McLean business, which was the biggest part of the George Wimpey business, was very much low-rise housing. The Bryant business and the Taylor Woodrow Homes business were also very much low-rise housing prior to their merger. The only part of the business that had any kind of mid-rise was Wimpey Homes. Certainly, ACM didn't really exist as a product.
I think what I'm trying to say to you is I could not categorically say today there could not be a building in the nineties, but we don't think that suddenly, you know, the scale of the cost balloons if 30 years becomes the accepted norm, if you see what I mean. Couldn't say it was zero, but couldn't, you know, not suddenly expecting it to change dramatically because of that. I go back to we've really had no issues raised by, you know, customers or building owners in buildings from that period.
Okay. Thank you.
Specifically on Deposit Unlock, we haven't been driving it hard. Help to Buy is still there in the marketplace. It's signed off. It's available. We haven't, in all honesty, seen enough of a challenge from the price gaps for us to need to use Deposit Unlock, which obviously has a cost and is therefore a choice that we would challenge our businesses to use carefully. We haven't been pushing an uptake and therefore it's too early for us to tell you that we think it will look like X, Y, or Z. It's there as a useful tool, but it's not needed yet, and we don't want our teams to use it unless they need it.
On the land creditors-
Okay.
You know, I'd expect when we get to March, we'll be reporting year-end land creditors just in excess of GBP 800 million.
All very clear. Thanks very much.
Thank you.
As another reminder, if you would like to ask a question, please press star followed by one on your telephone keypad now. Our next question comes from Ami Galla from Citigroup. Your line is now open. Please proceed.
Yeah, thank you, guys. Just two questions from me. The first one is on the land market. I mean, if you could give us some color in terms of what's happening to land price inflation and are the intake margins in the sector broadly similar to what they were normally pre-pandemic? The second one really is on the sort of as we think about the new sites that are going to be open in the second half of 2022, is there any change in the natural absorption rate in the business 2024 onwards?
Thanks, Ami. You know, on the land market, I mean, we have said before, and I touched very briefly, you know, it has undoubtedly tightened through the course of this year. The planning dynamic that we see, you know, sort of will also add to that because we can see, you know, peers who are, you know, short of outlets to fill their plans. I think the sector is still being, you know, responsible in how it's buying land. We're definitely seeing land price inflation, but obviously in an inflationary housing market you would expect to see that. I think we're not, you know, seeing kind of material suppression of intake margins.
I think what you do go back to though, in that environment, is having to be very clear about the merits of each site. You know, sort of strategic land starts to become much more critical again, you know, which is obviously a strength for the business. I think, you know, as we've, you know, talked about, you know, many times over the last two to three years, the balance between larger sites where there's less competition and smaller sites is key. We're very clear we want to buy a mix, you know, sort of. There will, you know, fairly clearly be a differential in the margin on acquisition between those two types of sites. You gotta, you know, sort of take your choice through that and maintain a balance in the business.
You know, it's why the comment in the statement, they're pleased that we continue to see smaller sites acquired by the teams. That continues to be key, but also some larger ones as well. Sorry, could you repeat the second question?
I was just thinking, as we think about the new sites that get opened in the second half of 2022, do the average private sales rate in the business, which was typically a function of larger sites, does that mix shift that slightly lower in the future years?
I think, you know, and it does flow on from the previous answer. Not massively. I think, you know, sort of if you went back to 2019, we had a higher sales rate, and we said at the time, you know, higher than we felt was quite right and the conditions at that point. You know, we don't expect to be back at that level. The sales rate that we've been running at through the last 12 months, we see as a reasonable reflection of the right thing to do. You have to remember that, you know, we have a different way of counting outlets to some of our peers, particularly, you know, the two bigger peers who have two brands.
We will often have one outlet with a higher sales rate on a site, whereas they may have two outlets with different brands, you know, with individually lower sales rate. The total level of competition on our site is no greater, so that's what tends to lead to us to having a higher sales rate, is the lack of two brands rather than any different view on the pace you run the site overall. You know, sort of, I don't see it changing materially as we go through the next couple of years if market conditions are stable. I think that change already came between 2019 and today effectively.
Thank you. That's very helpful.
Our final question comes from Arnaud Lehmann from Bank of America. Your line is now open.
Thank you, very much and good morning , gentlemen. I missed the beginning of the call, so apologies if my questions have already been asked. Firstly, a question for Pete. You announced your upcoming step down as CEO soon. Can you give us a bit of color around your decision? Is that a personal life decision, or is it anything related to the business? Secondly, I guess one of your shareholders has made a case that your margin should be, I guess, in the mid 20% rather than the low 20%, if I remember the comments well. I appreciate you might not want to discuss every conversation you have with your shareholders, but in principle, do you think there could be upside to your medium-term margin guidance?
Thank you.
Thank you, Arnaud. I mean, on a personal level, you know, sort of very comfortable to talk about that. I mean, obviously I've been in the job for a long time. It's been my plan to leave for some time now. In fact, my original plan would have been to leave around my 15th birthday, which was in August 2020. A combination of, you know, sort of, the necessary chairman change and making sure that we balance that right, and then the pandemic meant that effectively we pushed that back. The board and I have then been discussing it, particularly you know, between Irene, our new chairman, and I, you know, sort of, for some time now. Main driver's mostly personal, you know, in the sense of I've been doing it for a long time.
I'm looking forward to first of all having a rest and spending some time doing far too many hobbies that I don't get a chance to do. You know, then working out what I wanna do next career-wise. I certainly don't see it as kind of full retirement, but definitely time for a change. Of course they're also business related in the sense of, you know, you don't do a job like this. You know, certainly for as long as I've done it, without having a real, you know, sort of connection with the company and the people in it.
It's been really important to me that we manage it at a time that we think is right for the business, hence not doing it when we're going through a chairman change or, sort of through the early stages of the pandemic. I think the business is in a very strong place. The land investment that we've made give the business far more momentum than anybody else in the sector. The internal team is of a high quality, and it is in a very stable position. That means that actually a new CEO, whether internal or external, who takes on that role, has got a real window when they can get to know the business. They can actually form their own views about what's right but knowing that the business is moving forward.
I've seen too many times when you've got long-serving CEOs, that actually the business totally lacks momentum as they leave, and that's not healthy. The underlying driver is personal, but the timing is, it feels like the right time for the business. You know, you're right, I would never comment on a discussion with, you know, sort of any specific shareholder. I don't think any company would. But in terms of margin direction, you know, if you, if you go back over my comments, we've been clear on our guidance of 21%-22% for a long period of time. I think that is responsible and sustainable guidance. It's not always easy, you know, sort of, but I think it is deliverable and importantly it's deliverable sustainably.
I've always been clear, and it's come up on this call, there are certain circumstances where it can be a bit better. If you've got the right tailwinds and you manage everything perfectly, it can be a bit better. Can it be 26% sustainably? I don't believe so, and I don't believe that anybody with a broad geographic mix, you know, sort of looking sustainably at the business, at quality, at customer service, at people retention, can deliver that sort of sustainable level of margin.
That's very helpful. Thank you so much.
We have no further questions, so I'll hand it back to Pete.
Thank you. Thank you for managing the call for us, Maxine. I won't, you know, sort of make too much more cause I'm conscious of lots of questions there and thank you for that. You know, in a sense, I've already said what I wanted to finish with. I think the business is at a very strong place at this point in time and has the real potential and momentum to deliver a really solid performance in 2022. Actually, you know, the interesting bit there is the real underlying growth in a sector which is going to be growth constrained cause of planning in 2023 and beyond, because of the decisions that we've taken on land investment through the pandemic. Thank you very much for your time today, and I look forward to seeing you at the prelims.