Taylor Wimpey reports sales rate increase as firm completes cost-cutting move

Housebuilder Taylor Wimpey has said that around 450 roles are being lost under a cost-cutting programme which it has now completed.

In a trading update, the firm said a consultation announced in January had finished with the firm expected to making annual savings of £19m as a result.

Taylor Wimpey said the 450 figure, which is around 9% of the firm’s 5,000 employees, was a mixture of job losses and positions not being replaced. It said the cost of making the cuts, which include closing its Oxfordshire division, would be £8m.

The firm said it has seen weekly sales rates increase “incrementally” in recent weeks as mortgage availability has improved. It added that the number of sales achieved per site per week this year had increased to 0.66, excluding bulk deals, compared to 0.62 when it last reported to the market at the start of March.

This reservation rate figure, which compares to a figure of 0.97 reported in the same period in the boom market of 2022, increased to 0.75 when planned bulk sales were included in the figures, it said.

However, despite slowly improving conditions, Taylor Wimpey said it still expected build volumes to fall this year by as much as a third to between 9,000 and 10,500 homes, as set out in its full year 2022 results in March. Last year Taylor Wimpey built 14,154 homes. The figures come after Persimmon yesterday also said trading had improved in recent weeks with sales rates improving compared to the last quarter of 2022.

The firm said it had seen an increase in the overall sales rate compared to that announced on 2 March and that “pricing has remained resilient”. Nevertheless, given the hit from the mini-budget shock of last autumn, which saw sales rates in the fourth quarter of 2022 plummet, the firm said that its forward order book was over a fifth down at £2.38bn, compared to £3.03bn at the same point last year.

>> See also Bosses of Vistry and Taylor Wimpey latest housebuilding figures to criticise government

>> See also Top 50 housebuilders: Full tables

Build cost inflation remained high, Taylor Wimpey said in the statement, but was “beginning to moderate” from the 9-10% level reported last month. The firm said it will prioritise “value over volume” in order to build a strong order book and “optimise price going into 2024”, meaning “not all reservations taken between now and the end of September will be for completion in 2023”.

Chief executive Jennie Daly said: “We have seen continued recovery in demand from the low levels experienced towards the end of 2022, supported by good mortgage availability, and have seen an incremental improvement in sales rate as the Spring selling season has progressed.

“While we remain cautious of continued macroeconomic uncertainty, Taylor Wimpey is a strong and agile business differentiated by our high-quality landbank and experienced teams who have a sharp focus on operational discipline.”