Taylor Wimpey scales back home building plans due to cost-of-living crisis

FILE PHOTO: Construction workers work on a Taylor Wimpey housing estate in Aylesbury

By Aby Jose Koilparambil

(Reuters) -UK housebuilder Taylor Wimpey on Wednesday said it would build fewer homes this year than originally planned, citing a recent drop in its sales rate and a rise in cancellations due to a worsening cost-of-living crisis.

The company joined bigger rival Persimmon in flagging increasing stress in the housing market. A surge in mortgage rates has dented homebuyers' purchasing power and house prices are falling.

Taylor Wimpey said it now expects 2022 volumes to be broadly similar to the previous year. That compares with earlier guidance for low single-digit percentage growth.

But it also said it was on track to deliver operating profit in line with company-compiled market expectations of about 922 million pounds on the back of resilient pricing in its order book and firm cost control.

Shares in the High Wycombe-based company were flat in morning trade. They have slumped about 45% so far this year.

For the second half of the year to date, Taylor Wimpey said its sales rate had dropped to 0.51 homes per outlet per week and its cancellation rate had risen to 24%.

That compares with a sales rate of 0.95 homes and a cancellation rate of 14% for the same period a year ago.

British house prices last month recorded their first monthly fall since July 2021.

($1 = 0.8662 pounds)

(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Edwina Gibbs)