Taylor Wimpey warns jumps in mortgage rates weakened housing market
It came as the FTSE 100 giant revealed a plunge in sales and profits for the past six months.
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Housebuilder Taylor Wimpey has cautioned that higher mortgage rates have increased concerns over whether potential customers can afford to buy.
It came as the FTSE 100 giant revealed a plunge in sales and profits for the past six months.
Nevertheless, the company also told shareholders on Wednesday it is building properties “slightly ahead” of forecasts.
Taylor Wimpey said it saw an “encouraging” start to 2023 despite borrowing costs, but market conditions “weakened” in the second quarter.
It said it was particularly impacted by a sharper increase in mortgage costs in June after the Bank of England hiked the base interest rate from 4.5% to 5%.
The first half of the year has been characterised by variable market conditions including substantially higher mortgage rates
The update comes a day before the central bank is expected to announce its 14th increase in a row in its efforts to drag down inflation, with economists widely expecting a rise to 5.25%, with further increases still expected.
On Tuesday, Moneyfacts had reported the average two-year fixed mortgage deal was 6.85% while the average five-year fixed deal was 6.37%.
The housebuilder posted a 21.2% plunge in revenues to £1.64 billion for the six months to July 2, compared with the same period last year.
It also revealed its pre-tax profit dropped by 28.9% to £237.7 million for the half-year.
The group told shareholders that despite difficult market conditions, it has made strong progress on house builds and expects to complete between 10,000 and 10,500 homes by the end of the year.
Chief executive Jennie Daly said: “The first half of the year has been characterised by variable market conditions including substantially higher mortgage rates.
“While this has inevitably impacted our results, I am pleased that we have delivered a resilient performance, with first-half completions slightly ahead of our expectations.
“This performance is testament to the hard work of our teams on the ground and our strong focus on operational excellence and tight cost management.”