Housebuilding giant Taylor Wimpey has said profits will be at the top of end of City forecasts despite high mortgage rates continuing to impact demand.

The company, which has sites across Scotland, said it expects profits to be at between £440 million and £470m. While it is at the better end of forecasts, it is still well below the £827m from last year, which had been up 22% on the year before.

It said the positive profit prediction was "due to our focus on optimising price and sharp cost discipline".

Taylor Wimpey said: "The market continues to be impacted by weak consumer confidence influenced by high mortgage rates and cost of living pressures which are negatively affecting affordability for our customers.

"However, we have attractive and resilient locations which, combined with our enhanced customer and marketing tools, has enabled us to deliver a good performance against a challenging backdrop."

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As at November 5, its current total order book excluding joint ventures stood at £1.9 billion, down from £2.6bn last year, representing 7,042 homes, compared to 9,153.

It currently operates from 227 outlets, against 234 last year.

"As expected, we have continued to see build cost inflation moderate as the year has progressed," Taylor Wimpey said.

"Over the last year we have acted decisively and proactively to mitigate risk through the levers available to us.

"In light of reduced market demand, we have closely controlled costs and our investment in work in progress, with our teams focused on delivering efficiencies across the business. We continue to be highly selective in our land buying and year to date approvals are 3,000 plots."

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At the end of October 2023, its short term landbank stood at 82,000, against 83,000 in July.

Jennie Daly, Taylor Wimpey chief executive, said: "Taylor Wimpey has delivered a resilient performance in what continues to be a challenging market backdrop, reporting a robust sales rate and strong financial position, and reiterating our full year 2023 UK volume guidance in the range of 10,000 to 10,500 homes.

"Due to our focus on optimising price and sharp cost discipline, we now expect group operating profit to be at the top end of our guidance range of £440m to £470m.

"This performance is testament to the hard work of our experienced teams, who have continued to adapt and support customers through their buying journey while being focused on delivering efficiencies across the business."

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She added: "Looking ahead, while the market backdrop remains uncertain, we are confident in the medium to long term sector fundamentals, with a meaningful supply and demand imbalance in UK housing."

In the second half to date, its net private sales rate per outlet per week was 0.51, against 0.51 the year before with a cancellation rate of 21%, compared to 24%.

Excluding the impact of bulk deals, it achieved a net private sales rate of 0.48 for the second half to date, set against 0.50 for the same time last year.

For the year to date, it achieved a net private sales rate of 0.63, against 0.74, with a flat cancellation rate of 18%.

Excluding the impact of bulk deals, it achieved a net private sales rate of 0.57 for the year to date, set against 0.72 last year.

Garry White, chief investment commentator at Charles Stanley, said: "Although volumes are likely to hit a floor soon as the mortgage market stabilises and build cost inflation eases, the increased use of incentives and tough economic backdrop means margins are unlikely to recover rapidly."

Oli Creasey, property equity analyst at Quilter Cheviot, said: "The guidance suggests that the company has been able to maintain profit margins at the same level as in H1 2022 (operating profit margin was 1.4%), which is some way below the 20.9% reported in 2022, but still healthy, particularly in the wider context of higher interest rates and their impact on the UK property market."

Shares in Taylor Wimpey closed at 118.6p, up 2.64%, or 3.05p.