Taylor Wimpey PLC (LON:TW.) shares dropped at the opening bell on Tuesday as the UK’s second-largest housebuilder warned it was seeing “some signs of customer caution” in the UK property market.
The FTSE 100 company has £2.4bn worth of orders in the pipeline, some 9% more than it had this time last year and at the upper end of management’s expectations.
READ: Persimmon boss asked to leave after pay backlash
But despite these “solid” forward sales indicators, Taylor Wimpey said the current “heightened political and economic uncertainty” means it has seen a drop-off in demand, particularly in the south east of England.
The region is the most expensive in the UK in terms of house prices, with values soaring at the start of the decade, although the market there has cooled off in recent months.
On top of that, delays have impacted the openings of some developments meaning the total number of current outlets stands at 261, “slightly lower than expected” and 24 short of the year-ago period.
Still, the developer said it was on track to hit full-year forecasts thanks to a pick-up in second half sales, while build costs have also been kept under control and are expected to rise by 3-4% this year as it had previously guided for.
READ: TW sets aside £30mln to replace flammable cladding
“We have delivered a strong performance during the second half of 2018, with very good sales rates supported by positive customer demand and a supportive lending environment,” said chief executive Peter Redfearn.
“This builds on our strong forward order book and puts us on track to meet full year expectations.”
He added: “Looking ahead to 2019, we remain mindful of wider political and economic risks and the potential impact on customer confidence.
“However, with a strong balance sheet in place and a high-quality landbank, our business is well positioned to deliver further sustainable growth and cash flow over the medium term.”
Shares were down 2.4% to 159.2p in early deals on Tuesday.