Taylor Wimpey said the number of homes it completes this year will fall by around a third, as conditions for first time buyers remain challenging after the mini-Budget.
While there are signs that demand is continuing to recover, the FTSE 100 developer now expects to complete between 9,000 and 10,500 homes in 2023, down from 14,000 in 2022.
The company’s chief executive, Jennie Daly, told The Standard that there remained “affordability concerns” even as the mortgage market continues to recover from the turmoil of last September. She said interest rates on mortgages remain “meaningfully over what the customer had become used to in recent years.” The biggest impact was on new entrants to the housing market, who have to borrow a greater proportion of the cost of their home.
“At lower loan-to-values, mortgage interest rates are becoming less concerning. At higher loan-to-values that would affect first time buyers, they’re still high and we’re still hearing affordability concerns and cost of living concerns from our customers, particularly those at the high loan-to-value areas.”
Nonetheless, as the housing market enters its spring selling season, Daly pointed to improving conditions in the market, adding: “Enquiries from first-time buyers have increased since the new year”, in what she called an “early indicator” of “returning positivity”.
Daly also said that she and other industry figures met with Jeremy Hunt in February ahead of his Budget later this month’s Budget. “The Chancellor was interested in understanding what the market dynamics were,” she said.
“ We talked particularly around the challenges for first-time buyers … the cost of high loan-to-value mortgages, and we spoke about planning.”
Taylor’s profit for 2022 rose by almost a fifth to almost £828 million from revenue of £4.4 billion, up over 3%, with the group’s overall average selling price up 4% to £313,000. Year-on-year house price inflation of 8% offset build cost inflation, also of 8%. It lifted its dividend by 9.6% to 9.4p per share. It returned £474 million to shareholders in 2022
