Taylor Wimpey’s average weekly net private sales rate was 0.74 year-to-date, down from 0.77 in the prior year. Within that, cancellation rates improved from 16% to 14%.
The order book was 5% lower at £2.2bn, reflecting a fall in contracted sales volumes and a 1% reduction in average prices.
For the full year, rising energy costs mean that expectations for build cost inflation have risen, and are now expected to be in the low-to-mid single-digit range.
As previously announced, the total payout policy remains unchanged, but it has been tweaked to include a share buyback component. As a result, a final dividend of 2.95p (2025: 4.66p) per share was announced. £34.9mn of share buybacks were completed in the period, with the remainder of the £52mn programme expected to be completed over the first half.
The shares fell 4.7% in early trading.
Our view
Taylor Wimpey had a broadly positive start to the year, with sales rates only dipping slightly despite continued affordability struggles for buyers. But pricing looks set to weaken from here, and with the Middle East conflict pushing up building costs, markets reacted poorly on the day.
In line with the broader sector, Taylor Wimpey’s valuation has come under pressure in recent months. A large part of that is due to the conflict in the Middle East, with rising energy prices already feeding into higher building costs. As a result, build cost inflation guidance for the full year has been raised to a low-to-mid single-digit level.
Another key issue for 2026 is a softer average selling price in the order book, driven by a shift in sales away from the higher‑priced South. Affordability pressures there remain particularly stretched, prompting the group to phase out its Greater London apartment scheme and redeploy capital into other parts of the business.
Alongside buyer incentives running at around 6% of the selling price at the last count, margins are getting squeezed, and full-year profits now look set to fall around 7% below last year’s level.
At the start of 2026, markets had been expecting several interest rate cuts this year, which would have eased affordability pressures. But that dynamic’s flipped, with markets now pencilling in a couple of rate hikes. As a result, we think the scope for positive surprises is limited in the near term, and Taylor Wimpey will have to manage its workflows carefully.
Zooming out, there’s still a pressing need for new homes in the UK, so the longer-term demand outlook remains favourable. Taylor Wimpey’s significant land bank leaves it relatively well placed to react if demand does pick up. Recent changes to planning permissions have been helpful, but the sector’s still calling on the UK government to do more to help unlock supply further.
The balance sheet was in good shape last we heard. Given the current valuation weakness, we’re pleased to see the group’s payout policy change to include a buyback component. So while the payout ratio remains the same, the dividend yield is likely to drop from the high single-digit levels seen recently. As always, shareholder returns can go down as well as up.
Taylor Wimpey is well-positioned for the long term, with a strong balance sheet and a solid land pipeline. At current levels, the valuation could offer some long-term upside. But flagging demand means profits are set to come under pressure in the near term, so it’ll likely be 2027 before performance picks up. And of course, there are no guarantees.
Environmental, social and governance (ESG) risk
Most housebuilders are relatively low risk in terms of ESG, particularly for those in Europe. However, there are some environmental risks to consider, from direct emissions to the impact of their buildings on the local ecology. The quality and safety of their buildings is also a key risk.
According to Sustainalytics, Taylor Wimpey’s management of ESG risk is strong.
The group has a strong greenhouse gas reduction programme in place and reports on scope 1, 2 & 3 emissions. There are clear deadlines in place and a renewable energy programme has also been implemented. While the group uses recycled materials, there’s no disclosure of the percentage used.
Taylor Wimpey key facts
All ratios are sourced from LSEG Datastream, based on previous day’s closing values. Please remember yields are variable and not a reliable indicator of future income. Keep in mind key figures shouldn’t be looked at on their own – it’s important to understand the big picture.
This article is original Hargreaves Lansdown content, published by Hargreaves Lansdown. It was correct as at the date of publication, and our views may have changed since then. Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by LSEG. These estimates are not a reliable indicator of future performance. Yields are variable and not guaranteed. Investments rise and fall in value so investors could make a loss.
This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment.