Taylor Wimpey has warned that profits will come under pressure this year after subdued buyer demand forced the housebuilder to offload blocks of London flats to investors at discounted prices.
The FTSE-listed developer said slow demand from owner-occupiers meant a number of apartment schemes were not selling quickly enough through the private market. Towards the end of 2025, it therefore opted to sell several developments in bulk to investors to release capital, a move that will weigh on margins in 2026.
Jennie Daly, chief executive of Taylor Wimpey, said the decision was disappointing but pragmatic.
“These are good, well-built schemes in locations that Londoners want to live in,” she said. “But there’s just not the level of private demand needed to absorb them at the pace these developments require. While it hurts in the short term, recovering capital is in shareholders’ best interests.”
The discounted disposals, combined with expectations that build cost inflation will once again outstrip house price growth, prompted Taylor Wimpey to warn that its operating margin will be lower in 2026 than in 2025. Analysts said that implies at least a 5 per cent downgrade to consensus operating profit forecasts for next year, previously around £450 million.
Shares in the group fell as much as 4 per cent in early trading before recovering most of the losses to close down just 0.1 per cent at 103¾p.
Despite the margin warning, Taylor Wimpey reported a solid performance in 2025 against a challenging backdrop. The company completed 11,229 homes during the year, a 6 per cent increase on 2024. Revenues rose 12 per cent to £3.8 billion, while operating profits are expected to come in at about £420 million, marginally ahead of the prior year.
Daly described the outcome as “robust”, given the market conditions, but acknowledged that momentum faded sharply in the latter part of the year. After a strong start to 2025, sales slowed markedly in the run-up to the autumn Budget as speculation around property taxes dented buyer confidence.
Across the full year, Taylor Wimpey sold an average of 0.75 homes per outlet per week, unchanged from 2024. However, sales in the final two months of the year were around 20 per cent lower.
“Our second selling season in September and October coincided with peak Budget uncertainty,” Daly said. “That had a clear impact on buyer behaviour.”
Affordability pressures continue to weigh heavily on demand, particularly among first-time buyers. Although mortgage rates have eased, Daly said many aspiring homeowners are still struggling to save deposits and cover stamp duty and other upfront costs, especially without family support.
The builder also echoed concerns raised by peers about weak demand from housing associations, which typically buy affordable homes as part of planning obligations. Higher borrowing costs, along with cladding and maintenance liabilities, have constrained their ability to acquire stock.
“At a time when there is an opportunity for the government to secure more homes at better prices for society, housing associations have largely been unable to do so,” Daly said.
