Taylor Wimpey flags weaker sales

Taylor Wimpey warned on Thursday completions were likely to fall this year, the latest housebuilder to see higher mortgage rates and the cost-of-living crisis knock buyer confidence.

The blue chip said revenues for the year to 31 December had jumped 3% to £4.42bn, while operating profits rose 11% to £923.4m. Pre-tax profits jumped 22% to £827.9m.

Group completions were lower, however, falling to 14,154 from 14,302 a year previously, with a net sales rate of 0.68 homes per out outlet, compared to 0.91 in 2021.

Looking to current trading, the firm said it had seen signs of improvement since the fourth quarter.

But it added: "While it is encouraging to see an uptick in sales and ongoing robust customer interest in our homes, our reservation rate is significantly lower than in recent years, as affordability concerns weigh, particularly for first-time buyers.

"Accordingly, assuming prevailing market conditions continue, and given a challenging planning backdrop, we currently expect 2023 completions to be the range of 9,000 to 10,500."

Housebuilders were hit last year after the government’s disastrous mini budget sent mortgage rates soaring. Interest rates have also been rising throughout the year as the Bank of England looks to tackle inflation.

Jennie Daly, chief executive, said: "In a year marked by two distinct halves, we acted quickly and decisively to address rapidly-changing market conditions and continued to focus on operational excellence and efficiency.

"While the weaker economic backdrop continues to impact the near-term outlook, customer interest in our homes remains good."

On Wednesday, FTSE 250 householder Persimmon warned that completions could be as much as 40% down in 2023, in turn hitting margin and profits.