Labour blames the planning process for restricting housebuilding. Owl’s view is that they should turn their attention to “land banking” and  “the build-out rate” instead.

Taylor Wimpey pulls another brick away from housebuilding target

Tom Howard www.thetimes.com

One of Britain’s biggest developers has no plans to return to pre-pandemic levels of housebuilding in the near future, dealing a fresh blow to the government’s ambitious homes target.

Taylor Wimpey delivered more than 16,000 homes in 2019, but even with the post-lockdown housing “mini boom” brought on by the stamp duty holiday, it has not come near that figure since.

Last year, it completed just under 10,600 homes and bosses expect output to be similar in 2025. On Wednesday, they laid out medium-term plans showing that Taylor Wimpey aims to get back to 14,000 homes a year before the end of the decade.

This would still be 12 per cent or so below 2019, when a total of 243,000 homes were built across the UK. Labour is sticking to its promise of delivering 1.5 million new homes by the end of 2029, which would require an average of 300,000 flats and houses to be built every year.

To get anywhere near that figure, the government will be heavily reliant on the largest private developers. Almost all of them, however, are building fewer houses than they were, and industry consensus is that the 1.5 million target is unachievable.

Developers are all grappling with the same issues: a dramatic increase in build and regulatory costs that they have not been able to offset with higher prices; stubbornly high interest rates, which have left mortgage costs elevated; and no support for first-time buyers for the first time in 60 years.

On top of that, although Labour has sought to free up the planning system, it remains slow and especially so for high-rise blocks that must be signed off by the building safety regulator. The impact is being most keenly felt in London, where new-build housing has all but stopped.

Estate agents have reported a drop-off in both sales and enquiries in recent weeks as a result of speculation about a potential overhaul of the property tax system. Taylor Wimpey said it was mindful of the “impact of the delayed UK budget on short-term customer confidence”.

Bosses warned that “softer market conditions”, which began in the spring following the end of the stamp duty holiday, persisted over the summer. As a result, sales, after a stronger start to the year, have started to drop off.

Taylor Wimpey was selling an average of 0.65 homes a week at each of its 215 developments during August and September, down from 0.7 homes a week in the same period of 2024. Pricing has “remained broadly flat”, the company added.

Analysts said its performance showed that the market is “relatively subdued”. Persistent inflation means interest rates have not come down as fast as some had anticipated, and concerns about job security are starting to creep in. Economists expect those issues, and the uncertainty around stamp duty reform, to weigh on the housing market over the coming months.

Taylor Wimpey’s order book has contracted slightly and now stands at £2.12 billion, versus £2.15 billion this time last year. The group expects to deliver between 10,400 and 10,800 homes this year and is on course to deliver an operating profit of £424 million, which is broadly what analysts had pencilled in.

The shares, down 15 per cent since the end of June, improved by 1¼p, or 1.3 per cent, to close at 104½p. Analysts said investors should be reassured that the full-year guidance has been maintained and that bosses opted not to tweak the dividend policy, as some had speculated.