Taylor Wimpey plans £20m cost-cutting drive as market conditions tighten

Taylor Wimpey is planning to make £20m of efficiency savings a year in response to worsening market conditions.

The £4bn-turnover housebuilder today announced it has started a consultation on the unspecified proposals. It said it has already increased cost scrutiny, reduced its land commitments and is “closely controlling the release of investment in work in progress”.

In a trading update, it said: “The proposed changes would neither affect our existing market coverage or ability to deliver volumes from our landbank, nor our ability to deliver high quality product and service to our customers.”

Taylor Wimpey is the third major housebuilder this week to announce measures to counteract the tightening market. Persimmon yesterday announced a pause in site openings and Barratt on Wednesday revealed it was halting hiring.

The firm warned sales remain “significantly below” levels seen before the rise in mortgage rates following last September’s mini-Budget.

It said: “We enter 2023 with a lower private order book than in recent years and we expect overall volumes to reduce.”

But the housebuilder said it remains on track to hit around £921m of operating profit for the year in line with previous expectations. Despite the rise in interest rates, Taylor Wimpey’s completions remained stable at slightly more than 14,000.

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Taylor Wimpey also warned that Michael Gove’s proposed overhaul of national planning policy could have a negative impact on housebuilding.

It said: “Changes including amendments to the approach to housing numbers locally, a relaxation of the soundness test for plan-making and the removal of the need for planning authorities to maintain a five-year supply of deliverable housing sites could result in further delays and a shortfall in the supply of sites.

“In addition, the transitional arrangements proposed are likely to result in a meaningful hiatus in plan-making which is likely to further constrain the availability of land for housing.

Taylor Wimpey’s 2022 results will be published on 2 March.