Housebuilder Taylor Wimpey has seen annual profits almost halve and said it would build fewer homes this year, but flagged early signs of a recovery in homebuyer demand.
The group reported a 48% drop in underlying pre-tax profits to £473.8 million in 2023 after revenues slumped by more than a fifth to £3.5 billion.
Taylor said that given the more difficult housing market conditions, it was set to build between 9,500 and 10,000 homes in 2024 – down from 10,438 last year.
But it said there were green shoots of recovery thanks to lower mortgage costs and hopes that interest rates would come down in 2024, having been hiked to 5.25% last summer – the highest level since 2008 – which sent homebuyer demand slumping and house prices falling.
The results follow days after the Competition and Markets Authority (CMA) revealed it was investigating eight of Britain’s biggest housebuilders – including Taylor Wimpey – for suspected illegal information sharing amid concerns that collusion has been pushing up prices.
Taylor said in its annual results that it would “co-operate fully” with the investigation.
The group’s full-year report showed that the weekly private sales rate edged up to 0.67 per outlet so far in 2024 from 0.62 a year earlier, while the cancellation rate also fell to 12% from 17% a year ago, though it said customers were still taking longer to decide on sales.
Taylor said: “Whilst still early in the year and at the beginning of the spring selling season, current trading shows some encouraging signs of improvement with reduced mortgage rates positively impacting affordability and confidence in our customer base.”
Taylor saw average house prices on private sales rise 5.1% to £370,000 in 2023, but revealed that on an underlying like-for-like basis, property prices were 3% lower from their peak in September 2022.
It was also impacted by an 8.5% surge in build costs last year, although the group said cost increases had pared back to around 1% so far at the start of 2024.
Jennie Daly, chief executive of Taylor Wimpey, said the group was expecting the market to return to growth in 2025.
“Looking ahead, we are well positioned in an attractive market, with significant underlying demand for our quality homes and are poised for growth from 2025, assuming supportive market conditions,” she said.
Shares in the group fell more than 3% in Wednesday morning trading.