Taylor Wimpey's 2023 profits at top end of guidance

Housebuilder Taylor Wimpey is set to deliver profits towards the top of guidance for the full year but said that the market remains "uncertain" despite a recent reduction in mortgage rates.

In a pre-close trading update for the 2023 financial year, the group expects operating profit to be at the high end of the target range of £440m to £470m.

"Despite the difficult market conditions throughout the year, we maintained a sharp operational focus and delivered a good performance," said chief executive Jennie Daly.

Total group completions came to 10,848 last year, down sharply from 14,154 in 2022, with the net private reservation rate falling to 0.62 homes per sales outlet per week from 0.68. Excluding the impact of bulk deals, the net private sales rate was 0.54, well below the 0.65 reported in 2022.

Nevertheless, UK average selling prices on private completions were up 5.1% on the year before at £370k.

"Looking ahead, it is encouraging to see a reduction in mortgage rates, however, in the short term the market remains uncertain and the planning backdrop extremely challenging," Daly added.

Taylor Wimpey ended the year with a lower order book valued at £1.77bn, down from £1.94bn at the end of 2022, which represents 6,999 homes down from 7,499 previously.

"As previously guided, we enter the year with a reduced order book. Whilst too early in the year to gauge customer behaviour, we have seen good levels of enquiries so far this year and it is encouraging to see recent mortgage rate reductions which will improve affordability," the company said in its outlook.

"The planning environment remains challenging and will continue to impact outlet openings. However, as we look ahead, with a strong balance sheet and a highly experienced management team, we remain well positioned to optimise our strong landbank and strategic pipeline and remain confident in the attractive medium and long term fundamentals of the sector."