Shares in Taylor Wimpey slipped on Wednesday after the housebuilder blamed the “subdued” property market for cuts to its housing and profit targets. 

The London-listed builder said rising mortgage rates caused by the Iran war are deterring Brits from buying new homes, slowing the usually-busy Autumn homeselling season. Shares in the group fell 4.5 per cent on Wednesday morning, to 78p.

Taylor Wimpey becomes the latest UK housebuilder to take a hit from the country’s ailing property market, as the effects of low consumer demand are worsened by higher building costs caused by the Middle East conflict. 

The housebuilder told shareholders it now expects to build 10,500 homes this year, falling short of the bottom end of the 10,600-11,000 target it had set itself in March. 

Building fewer homes than expected will weigh on Taylor Wimpey’s profit, the firm said. It now expects to make a return towards the bottom end of consensus targets, which put the group’s operating profit between £262m and £299m.

Chief executive Jennie Daly said: “The Autumn selling season has been more subdued, as higher mortgage rates and living costs continue to reduce customer affordability.

“We remain focused on supporting customers, operating efficiently, maintaining our strong balance sheet and progressing our strategy, and are on track to open more outlets this year, with progress reflecting our early proactive approach to planning.”

Housebuilders await Your First Home

Taylor Wimpey has been selling fewer homes this year, with its net private sales rate standing at 0.69 in the year to date, below last year’s 0.72. Market conditions have worsened in recent months, with the group’s sales rate falling to 0.60 after June, down from 0.63 in the same period last year.

Analysts at stockbroker Peel Hunt pointed towards the housebuilder’s claim that it is being “proactive in managing the cost base”. They said: “We suspect [this] means managing headcount, if not reducing the regional footprint at the margin.”

Last week, beleaguered housebuilder Vistry said it is taking the axe to its 4,000-strong workforce by cutting down its number of regional offices from 25 to 12.

He said: “The theme of Taylor Wimpey’s November trading update was one of a more subdued autumn selling season, with completions guidance trimmed and operating profit guided to the bottom end of the consensus range for the first time.”

The housebuilder welcomed the government’s revival of George Osborne’s Help to Buy scheme, which offered equity loans to help Brits afford the deposit on their first home. 

Labour’s Your First Home programme, which will come into effect in April, will “support getting people onto the property ladder. Our strong first time buyer proposition and growing outlet base position us well as the scheme develops,” Daly said.

But the scheme has been criticised by some housing experts, who warned that the £650,000 cap on inner London homes will mean many first-time buyers in the capital will not be eligible for this support. 

Bellway, a rival housebuilder, warned last month that the announcement of the new programme could slow the housing market in the short-term by causing prospective buyers to wait until it comes into force next year.