Taylor Wimpey plc (TW.) Ordinary 1p Shares
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(1.11%)
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HL comment (12 November 2025)
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Taylor Wimpey’s average weekly net private sales rate fell from 0.71 to 0.63 since the mid-year point. The group called out continued affordability pressures and uncertainty ahead of the upcoming UK Budget as drivers of the slowdown.
The order book fell by £0.1bn to £2.1bn, reflecting a backlog of 7,253 homes. Underlying pricing has remained broadly flat over the period, and build cost inflation remains at low single digits.
Full-year guidance was reiterated, with the group expecting to build between 10,400-10,800 new homes and generate around £424mn of operating profits.
The shares fell 2.7% in early trading.
Our view
Taylor Wimpey’s sales momentum has slowed since the half-year mark due to uncertainty ahead of the upcoming UK Budget. But house prices and the order book are holding firm, so full-year profit guidance remains on track for now.
Unsurprisingly, buyers have been holding off from signing on the dotted line in case the Chancellor’s announcement brings beneficial tax changes to property purchases. And with Christmas hot on the heels of this delayed budget, we see little scope for a rebound in activity before the new year.
With a pressing need for new homes in the UK, the long-term demand outlook remains favourable. Recent changes to planning permissions have been helpful, but the sector is calling on the UK government to do more to help unlock supply further.
On the demand side, affordability remains a key issue to wrestle with, and that’s largely out of Taylor Wimpey’s control. Real wage growth, a competitive mortgage market, and expectations of further rate cuts over the next year are all helpful. If inflation can be tamed further, there’s scope for rates to come down a little faster and provide a boost to the sector. It’s potentially a virtuous circle with margins also standing to benefit from lower inflation.
Taylor Wimpey’s significant land bank leaves it relatively well placed to react if demand does pick up. But that’s not the full picture. The landbank’s value can’t be unlocked without the relevant planning permissions, where there’s plenty of frustration across the industry.
With its 2026 permissions in the bag, the company’s in a good place. It’s also supportive of recent changes to the planning process. But if bottlenecks in the system aren’t cleared, the target of reaching 14,000 annual completions in the medium term becomes more challenging.
The balance sheet was in great shape last we heard, arguably one of the strongest in the sector. That provides plenty of cover for the generous prospective dividend yield of 8.8%. If plans to use the landbank more efficiently work out, that could release even more cash to investors. But there are no assurances of successful delivery or further shareholder payouts.
Taylor Wimpey is doing well in some challenging conditions. Looking further out, we think the group is well-positioned, with a strong balance sheet and a solid land pipeline. However, its fortunes remain tied to the economic backdrop and government policy. The outcome of November’s Budget will be key to the outlook for 2026.
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
Forward price/book ratio (next 12 months): 0.89
Ten year average forward price/book ratio: 1.40
Prospective dividend yield (next 12 months): 8.8%
Ten year average prospective dividend yield: 8.0%
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.
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