Joint venture disposal and cladding remediation costs dampen Taylor Wimpey’s profit

The JV was formed in 2017 to deliver a 12 to 15-year estate regeneration scheme that included a mixed-use development of up to 2,550 homes, improved community facilities and a new park. 

Under the JV, 139 homes, a new school, a church, a multi-use games area and play area have been successfully delivered.

In August last year, Taylor Wimpey revealed it was expecting to increase its spending on fire safety by £88m to £333m.

Elsewhere in its annual trading update, its group operating profit of £416.2m was in line with its guidance, with an operating margin of 12.2%. The firm said this reflects the build cost and pricing dynamics, as well as the impact of overhead costs being recovered across fewer completions.

Jennie Daly, chief executive of Taylor Wimpey, said: “I’m pleased with our performance in 2024, delivering a strong sales rate and in-line results, while achieving the highest customer service scores and overall build quality that we have ever had at Taylor Wimpey. This is testament to the hard work and commitment of our teams across the group.”

The house builder highlighted that an “appetite for Section 106 affordable housing continues to be impacted by headwinds faced by housing associations”, however it reported “good visibility on this year’s affordable deliveries”.

More than 200 landlords signed up to the new Section 106 clearing service in January. The service was set up after months of concern after house builders warned that fewer social landlords were buying their Section 106 properties, which was holding up private housing in the process.

On development, Taylor Wimpey revealed that JV completions were down slightly on the previous year to 10,593. Of these, 2,178 were affordable homes.

Ms Daly added: “The start of the spring selling season has been robust and we have seen good levels of demand for our homes. 

“Affordability – while remaining a challenge for many, especially first-time buyers – is also moving in the right direction. As a result, our total order book is up on last year, putting us in a strong position to grow housing volumes this year.

“We welcome the government’s recent planning reforms which are capable of delivering a real step change in planning outcomes. We look forward to seeing increased resources and a focus on the implementation phase to drive these outcomes and deliver much-needed new homes across the UK.”

The house builder reported “a strong land bank” and strategic pipeline with more than 26,500 plots for determination in the planning system by the end of the reported period. 

Plus, it was more active in the land market than expected in 2024. Taylor Wimpey approved around 12,000 plots, which was partly a reflection of an increase in attractive opportunities brought forward in the run up to the government’s Budget last year.