Taylor’s chief executive, Jennie Daly, told The Standard that the “subdued” sales rates across the industry reflected “challenges for first-time buyers,” who are “fundamental to a healthy housing market, whether you are selling to them directly or not”.
She added: “Last quarter was quite a shock – the mini-Budget, the withdrawal of mortgage products, [then] those coming back onto the market and now starting to settle. It just takes time for customers to overcome any caution or concerns.
“House prices probably peaked in September and then plateaued around that now-infamous time of the mini-Budget. House price correction isn’t necessarily going to support the likes of first-time buyers getting into the market, it’s more around the availability of higher loan-to-value mortgages at an affordable rate.”
The company stood by profit forecasts of £921 million for the full-year, but said in a trading update that “sales remain significantly below levels seen prior to the rise in mortgage rates in the third quarter of 2022” and that “We expect overall volumes to reduce in 2023.”
It also announced plans to save £20 million a year in costs which will include job cuts.
In London, the demise of the government’s Help to Buy Scheme -- which aided first-time buyers in building a deposit -- also had an impact, with higher prices meaning bigger down payments are required in the capital. Daly said developments including Greenwich Millennium Village were affected. First-time buyers make up a “meaningful proportion” of Taylor’s sales between about 30% and 35%, she said.
Taylor’s average selling prices continued to rise, by 6% on private sales to £352,000. But cancellation rates were also up, hitting 18% for the full-year, up from 14%, and coming in at 23% in the second half.
The company’s stock rose 1p to 114p.
Richard Hunter, head of markets at Interactive Investor, said: It remains to be seen whether the dark outlook is fully factored into share prices in a sector which has borne the brunt of UK economic pessimism over the last year”.