The boss of Taylor Wimpey has blamed weak market conditions that hit the firm’s bottom line on the uncertainty surrounding the forthcoming Budget.
Jennie Daly, chief executive of the housebuilder, said: “Market conditions remain challenging, impacted by uncertainty ahead of the upcoming UK Budget and continued affordability pressures.”
Shares in Taylor Wimpey were down over 3.5 per cent as markets opened to 102.01p.
The sour sentiment spread across the sector, with housing giants topping the blue-chips fallers. Berkeley was down 1.6 per cent, Rightmove 1.5 per cent and Barratt Redrow 1.4 per cent in early trading.
It follows the Taylor Wimpey’s net private sales rate – how many homes it sold per site per week – falling to 0.63 between 30 June to 9 November, down 11.3 per cent from the previous year.
Meanwhile, the firm’s order book slumped 6.7 per cent year-on-year with 7,25 homes lined up as of 9 November.
The pipeline’s value dropped 4.4 per cent to around $2.1bn (£1.6bn).
The firm said it suffered “softer market conditions” in the second half of the year as questions around the Budget continued to arise.
Dan Lane, lead analyst at Robinhood UK, said: “Housing market uncertainty is really taking its toll on Taylor Wimpey.”
Lane added the “Budget nerves” were “evident” and after a “dismal year for Taylor Wimpey so far”.
“Both the house builder and the UK consumer are in need of clarity and a meaningful confidence boost.”
Britain’s housing market has taken a hit on the road to 26 November with many buyers adopting a “wait and see” approach.
Tax chatter dampens housing market
Last month, property directory Zoopla found the usual Christmas slowdown has “begun six to eight weeks early”, with buyer demand down eight per cent and sales agreed down three per cent year on year.
“Here’s the hard evidence showing what we already knew – Labour’s fearmongering about what’s coming in the next Budget has caused an otherwise booming housing market to contract,” Simon Gerrard, chair of Martyn Gerrard Estate Agents, said.
One policy set to disrupt the market where chatter has intensified is a mansion tax.
The Chancellor is understood to be weighing a change to ouncil tax payments as a way for owners of more expensive houses to pay more.
It’s one of a series of ways Rachel Reeves is mulling taxing higher earners, without a blanket wealth tax.
Although no decisions have been taken, Reeves has said that higher taxes on the wealthy will be “part of the story” when she takes to the dispatch box on November 26 and aims to fill an estimated £30bn gap in the Treasury’s finances.
Lane said: “If tax on transactions or ownership rises, demand might soften particularly at the pricier end – the sector will be hoping for expedited planning reforms instead from the Chancellor. In that case, they could see better supply and reduced delays.”