Housebuilder Taylor Wimpey (TW.) maintained its cautious earnings outlook for FY26 due to fewer completions and price pressures. The firm said it started the year with softer pricing in its order book so results would be H2 weighted.
Affordability issues
As of 1 March, Taylor Wimpey’s order book excluding JVs was 7,678 homes against 8,098 a year earlier. By value, forward orders were worth £2.18 billion against £2.28 billion at the same point in 2025.
The firm said the Spring selling season had started well, although weekly net private sales were slightly down on last year. It also said while affordability was improving it was still ‘difficult’ for first-time buyers to access the market.
The problem was particularly evident in the South of England, where ‘muted’ demand was constraining sector output. As a result, pricing was weaker than in the North where the firm managed to capture some price growth.
According to property company eXp, in over 60% of the UK housing market the average mortgage deposit exceeds the average salary. With an average house costing around £273,000, a 15% deposit is just under £41,000 against the average wage of £40,436.
Taylor Wimpey also updated its distribution policy, with a view to returning 7.5% of net assets or at least £250 million each year. Within that, 5% of net assets will be distributed as ordinary dividends and 2.5% as special dividends or buybacks.
The board said ‘the greater flexibility provided by this approach is in the best interests of all shareholders’. For FY25, the total payout is £322 million, comprising of £270 million of dividends and a new £52 million share buyback.
After a torrid couple of weeks where Taylor Wimpey stock lost more than 12%, we expected a small bounce today. While a lower margin and lower earnings aren’t great, the company had already warned on the outlook in January.
The new news is distributions will be skewed towards dividends rather than buybacks, which is music to our ears. We still don’t think it’s time to buy, though, especially given the issue of affordability for first time buyers.
Read the press release here: https://www.taylorwimpey.co.uk/corporate/investors
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