Taylor Wimpey has warned that escalating costs are filtering through its supply chain as the Middle East conflict drives energy prices upwards, becoming the latest property developer to face headwinds from softer house prices, hesitant buyers and mounting construction costs.
Ahead of its annual general meeting on Tuesday, Taylor Wimpey informed investors that build cost inflation is "now expected to be low to mid-single digit for 2026", with cost pressures and surcharges "starting to come through from our supply chain". The firm had previously projected build cost inflation in the low-single digits.
The update came as the housebuilder reported a net private sales rate of 0.74 per outlet each week for the year to 26 April, down from 0.77 a year earlier. Meanwhile, Taylor Wimpey also posted a total order book valued at £2.23 billion, down from £2.33 billion year-on-year. The group pointed to "resilient" customer demand but acknowledged it has also experienced "some underlying price pressure", with pricing across its order book declining 1% year-on-year.
Last month, the business said earnings were set to fall in 2026 amid the challenging property market. Jennie Daly, chief executive, said: "Sales in the year to date have been steady and our teams continue to work extremely hard to support customers through their homebuying journeys against ongoing affordability challenges and an increasingly uncertain macro backdrop.
"We are committed to delivering high-quality homes and driving our assets and continue to see good progress on planning and outlet openings whilst maintaining strict operational discipline. With highly experienced teams, a high-quality landbank and a healthy balance sheet, we remain focused on delivering growth over the medium term and value for all our stakeholders."
Dan Coatsworth, head of markets at AJ Bell, said: "Taylor Wimpey's update implies a small step back in terms of sales and pricing. It is watching inflation closely as there is a risk that materials to build a home become a lot pricier – which is not good news when Taylor Wimpey's home selling prices are in retreat. It's no wonder investors are displeased with the update as it suggests harder times ahead."
Shares in the FTSE 250 company dipped in early trading as a consequence of the update, falling to their lowest point in some 13 years.
