Weaker economic climate hits sales at Taylor Wimpey

Taylor Wimpey reported a fall in its sales rate on Wednesday alongside a spike in cancellations as the mounting cost-of-living crisis dented demand.

Updating on trading, the blue chip said it achieved a net private sales rate of 0.74 homes per outlet per week for the year to date, compared to 0.95 a year previously.

That fell to 0.51 homes per outlet per week in the second half in the year to date, "reflecting customer response to heightened levels of economic uncertainty".

The cancellation rate also rose sharply, and now sits at 24% compared to 14% a year earlier.

The current total order book as at 6 November was £2.6bn, down from £2.8bn a year ago, with an order book of 9,153 homes compared to 10,643 in 2021.

But Jennie Daly, chief executive, said: "In a challenging economic and political backdrop, we are performing well and are on track to deliver full year operating profit in line with expectations.

"While sales rates have been impacted by wider economic uncertainty, we continue to see good levels of customer interest in our homes."

The market is currently forecasting annual operating profits of around £922m.

The firm, which posted interim results in August, added that group volumes were expected to be "broadly similar" to 2021, "given the uncertainty of the market", and that higher mortgage rates would add to the cost-of-living "challenges" already hitting its customers.

But it insisted: "Despite the more challenging short term conditions, we remain confident in the long-term sector fundamentals, with a continued meaningful supply and demand imbalance in UK housing."