Shares in Taylor Wimpey PLC (LSE:TW.) fell 3% to 101p after the housebuilder flagged a modest miss for 2025 and warned that profitability is likely to come under further pressure this year.
The group delivered 11,229 homes in 2025, including joint ventures, with 10,614 completions in the UK, landing within guidance. Sales rates were unchanged at 0.75 homes per outlet per week, and revenue rose to £3.8 billion.
However, operating profit of about £420 million, equating to a margin of roughly 11%, leaves pre-tax profit at around £390 million, some 2–3% below market expectations.
While underlying house prices held up, Taylor Wimpey said bulk deals agreed later in the year were struck at lower prices, leaving overall pricing in the order book about 0.5% lower year on year.
Combined with low single-digit build cost inflation, this means operating margins are now expected to fall in 2026, rather than rise as many analysts had assumed.
Uncertainty around last autumn’s Budget weighed on demand towards the end of the year, reducing the forward order book and pushing profits more heavily into the second half of 2026.
Despite the near-term pressure, the balance sheet remains strong, with £343 million of net cash and a landbank of 77,000 plots.
At current levels, the shares offer a dividend yield of more than 9%, reflecting both income appeal and lingering caution over the outlook, Peel Hunt noted.
The broker reiterated its 'hold' advice and 110p price target.