March 5 (Reuters) - British homebuilder Taylor Wimpey on Thursday forecast lower profit for 2026, as softer pricing and elevated costs weigh on its business. Although tax uncertainties eased after the
British homebuilder Taylor Wimpey warns on profit as margin pressures deepen
Profit Warning and Market Outlook
March 5 (Reuters) - British homebuilder Taylor Wimpey warned on Thursday that profits would fall this year as build cost inflation and softer pricing squeezed margins, outweighing positive signs from the spring selling season and recent planning reforms.
It expects 2026 adjusted operating profit to be around 400 million pounds ($533 million), down from 420.6 million pounds reported last year, with build cost inflation still seen in the low single digits.
Although tax uncertainties eased after the November budget, raising hopes of hesitant buyers returning to the market, housebuilders have warned that a meaningful recovery in 2026 remains elusive.
Performance and Margin Pressures
Better Times Seen in Second Half
BETTER TIMES SEEN IN SECOND HALF
In January Taylor Wimpey warned that its 2026 profit margin would decline, becoming one of the first major UK homebuilders to flag such pressure.
Taylor Wimpey expects its performance to be more robust in the second half of the year as it targets UK home completions, excluding joint ventures, of between 10,600 and 11,000 units in 2026, with about 40% of completions in the first half.
It delivered 10,614 UK home completions in 2025, with revenue rising 13% to 3.84 billion pounds.
Shares in the company rose more than 3% in early trade.
Market Conditions and Affordability
Despite government reforms to ease regulatory bottlenecks and boost market activity, affordability constraints continue to dampen demand particularly among first-time buyers, forcing builders to rely heavily on incentives to boost sales rates.
Spring Selling Season and Sales Performance
Spring Selling 'Progressing Well'
SPRING SELLING 'PROGRESSING WELL'
While the company said its spring selling season was "progressing well", year-to-date net private sales rates have slipped to 0.74 homes per outlet per week from 0.76 a year earlier, with customer interest yet to fully translate into firm orders.
Its order book stood at 2.18 billion pounds as of March 1, down from 2.28 billion pounds a year earlier.
Dividend and Share Buyback
The builder also launched a 52 million pound share buyback, but opted to cut its final dividend to 2.95 pence per share from 4.66 pence in the prior year.
Industry Comparison
In February, rival Barratt Redrow cut its interim dividend as UK homebuilders grapple with build costs rising faster than house prices amid a sluggish recovery.
($1 = 0.7504 pounds)
(Reporting by Raechel Thankam Job in Bengaluru; Editing by Subhranshu Sahu and Jan Harvey)
