Taylor Wimpey forecasts housebuilding surge in second half of year

Taylor Wimpey is expecting to build up to 10,000 homes this year, at the top end of previous estimates.

The developer upgraded its annual building forecast on Wednesday, saying that it expects a bounce-back in the second half of 2024, following a slow first half.

Taylor Wimpey’s operating profit fell 22.6% to £182.3 million during the six months to June 30, while sales fell 7% and home completions dropped 7.7% to 4,728.

It said the slow period was caused by a delay in the Bank of England cutting the UK’s base interest rate which meant mortgages were more expensive.

The prospect of a likely rate, cut either this week or in September, means it will meet the “upper end” of previously announced completion guidance of 9,500 to 10,000 homes.

The number would still be lower than the 10,400 homes completed in 2023, but sounded a note of optimism amid a persistent downturn for housebuilders of late.

Experts have said the Bank’s next decision on rates is on a knife-edge ahead of a meeting on Thursday August 1.

The UK’s base rate has been held at 5.25% since August last year as part of the central bank’s task to put a lid on unruly inflation.

Taylor Wimpey also said it expects changes to the planning system by Labour to give housebuilders a boost.

Earlier in July, chancellor Rachel Reeves said the national planning policy framework will be reformed, including restoring mandatory housebuilding targets for local authorities as part of the drive to build 1.5 million homes over five years.

The company said in a statement that planning reform will be “key to unlocking future years land supply”, adding that Labour’s plans could “create a positive future impact on the sector”.

Jennie Daly, chief executive of Taylor Wimpey, added: “Though it is early days for the new Government, we welcome their recognition that planning is a major barrier to economic growth, of which housebuilding is a significant component, and we look forward to working constructively with them to deliver much-needed new homes across the UK.”