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I gained’t sugarcoat this: the Taylor Wimpey (LSE: TW) share worth had an absolute stinker in 2025, falling 16%. 2024 was horrible too. The housebuilder is down virtually 30% throughout these two years mixed.
Sadly, I’ve held the FTSE 250 inventory all through. After I first purchased it in 2023, it was nonetheless a member of the FTSE 100.
The rot goes deeper than that. A decade in the past, means again in pre-Brexit Christmas 2015, Taylor Wimpey shares traded at round 200p. Right now they sit at roughly half that, close to 100p. The roof is leaky and the foundations look shaky, but I’ve purchased the inventory on 4 separate events within the final two-and-a-bit years. Why?
I really feel like a kind of home hunters who falls in love with an previous property, then throws a fortune at it. Taylor Wimpey is a doer-upper. However it does have one large benefit. Really, two.
FTSE 250 comeback potential
First, it stays a longtime, profitable, and worthwhile enterprise. That’s straightforward to overlook when observing its risky share worth.
In 2024, Taylor Wimpey generated working revenue of £416.2m. Sadly, that was down 11.5% from £470.2m the yr earlier than, therefore investor uncertainty. It’s on observe for £424m in 2025, a small enchancment.
The group ended 2024 with internet money of £565m. That’s down from £678m in 2023 however nonetheless a reassuring buffer. This isn’t an organization in disaster.
In fact, buyers don’t simply need income, they need progress. And these have been brutal occasions for the sector.
The associated fee-of-living disaster has hit housebuilders from all sides. Increased inflation pushed up mortgage charges, hammering affordability and squeezing purchaser incomes. On the identical time, labour and supplies prices climbed, whereas the federal government’s hike to employers’ Nationwide Insurance coverage contributions added to the ache.
There are many explanation why Taylor Wimpey shares have struggled. However there are additionally explanation why that would change. Inflation fell again to three.2% in November, a three-year low, and will proceed easing subsequent yr. If that occurs, a lot of these pressures ought to step by step elevate.
Following the most recent Financial institution of England fee lower, new mortgage charges have dropped to round 4%, and there’s speak of three% offers showing on the horizon. That ought to increase demand.
Inventory predictions
Analysts appear eager. The 16 brokers providing one-year share worth forecasts produce a median goal of simply over 128p. In the event that they’re proper, that’s a acquire of round 25%, turning a £10,000 funding into £12,500. One dealer is forecasting progress of greater than 70%, to 172p. We will dream.
However there’s extra.
Which brings me to Taylor Wimpey’s second huge benefit: an eye catching trailing dividend yield of 9.22%. The board trimmed the payout by 1.25% in 2024, but the shares are nonetheless forecast to yield 8.86% in 2026.
Add that to the potential share worth rise progress and £10k turns into £13,385. Nothing right here is assured, in fact. The UK economic system stays fragile, inflation might show sticky, rates of interest might not fall, and property stays costly.
But with a price-to-earnings ratio of 12.4, Taylor Wimpey seems good worth and value contemplating. It might take a yr or two to completely ship, so buyers might should be affected person a short while longer. I’ve a giant stake on this inventory. I’m tempted to purchase much more.
