Taylor Wimpey, one of Britain's three biggest housebuilders, is walking away from new apartment schemes in London. The company will finish the high-rise developments it already has under way in the capital, then stop. It does not expect conditions to justify any meaningful new London projects in the near term.
For a city that started work on just 4,150 homes in 2024/25 against a target of 88,000, losing one of the country's largest builders is a serious blow. But read Taylor Wimpey's own accounts and the decision looks less like a retreat and more like a business doing what its numbers tell it to. This post looks at what the company has said, what its financial performance reveals, and how the rest of the UK housebuilding sector is faring according to the latest Plimsoll analysis.
Why Taylor Wimpey is leaving London
The signals have been building for over a year. Taylor Wimpey has said it grew cautious about London first because of planning delays and later because of weak viability and rising regulatory costs. It has since confirmed it is phasing out of Greater London apartment schemes altogether.
Chief executive Jennie Daly set out the reasoning to investors. She pointed to planning and viability problems in London, plus the constraints imposed by the Building Safety Regulator, and said the company had "limited appetite" to put its capital back into the city.
The Building Safety Regulator matters most here. Since the Grenfell reforms, any high-rise residential block needs the regulator's sign-off at several stages. In practice that has added months, sometimes years, to London schemes, which are almost all high-density. Outside London, a housebuilder can put up two-storey family homes on greenfield land with no such gateway.
The exit is orderly rather than abrupt. Last autumn Taylor Wimpey had nine unfinished apartment schemes in London, worth around £270m, which it plans to complete by 2029. After that, the plan is to focus on smaller sites, open more sales outlets elsewhere, and recycle capital faster to lift returns. The company has even accepted lower prices on some London stock to release that cash sooner.
City Hall has tried to respond. With London housing starts at a 16-year low, Sadiq Khan confirmed earlier this year that schemes starting within the next four years will not pay the Community Infrastructure Levy. A new fast-track planning route also lowers the affordable housing requirement to 20% and removes density guidance. So far, that has not been enough to change Taylor Wimpey's mind.
What the numbers say
Taylor Wimpey's profits have fallen by more than four-fifths in three years, from £827.9m before tax in 2022 to £146.5m in 2025. Its Plimsoll report shows a business that is still big, still solvent and still selling, but one that is earning far less from every pound tied up in it. That is exactly the problem a slow, capital-hungry London apartment scheme makes worse.
Sales have recovered, profits have not
Sales dipped from £4.42bn in 2022 to £3.40bn in 2024, then bounced back 13% to £3.84bn in 2025. That growth is well ahead of the industry average of 3.0%, and Taylor Wimpey ranks 5th in the sector by sales.
Profit tells a different story. The pre-tax margin has slid from 18.7% in 2022 to 13.5%, then 9.4%, and just 3.8% in 2025. Trading profit fell from £839.2m to £189.1m over the same period. On profit, the company ranks only 14th in its industry, well below its position on sales.
The gross margin of 17.1% still beats the industry average of 13.3%, so the homes themselves remain profitable. The squeeze is happening further down: in build costs, overheads, write-downs and the cost of carrying land and work in progress.
Capital is working too hard for too little
Housebuilding is a game of capital turnover. In 2025 Taylor Wimpey held £5.27bn of stock, meaning land and homes under construction, out of £5.92bn in current assets. Its stock turns over roughly once a year.
Against that asset base, pre-tax profit returned just 2% of total assets in 2025, down from 13% in 2022. Plimsoll's own Trading Stability chart flags a well below average sales return on total assets in the latest year.
This is where London bites. A high-rise scheme ties up money for years before a single flat completes, and Building Safety Regulator gateways stretch that wait further. When returns on assets have fallen to 2%, locking hundreds of millions into slow, uncertain apartment blocks is hard to justify. Smaller suburban sites that sell faster put the same money to work more often.
Cash is being drawn down
Taylor Wimpey's cash fell from £1.01bn in 2022 to £527.1m in 2025. Interest charges rose to £42.4m in 2025, up from £27.4m a year earlier, and Plimsoll notes profits would have been significantly higher without them.
The company also kept paying generous dividends. Shareholders received £330.4m in 2025, over 226% of that year's pre-tax profit. As a result, retained profit was negative for a second year, at minus £218.4m in 2025 and minus £118.2m in 2024, and shareholders' funds fell from £4.50bn to £4.19bn.
With cash halving and pre-tax profit covering less than half the dividend, every pound of capital needs to earn its keep. Freeing up £270m from London apartment schemes and redeploying it into quicker sites is a logical response.
Value has fallen, but the fundamentals are sound
Plimsoll values Taylor Wimpey at £6.4bn including debts, down from £9.6bn in 2022, and notes the value has fallen in each of the last two years. Its Plimsoll Chart, a measure of overall financial health, still sits well above the industry average but is on a falling trend.
The report also models a proposed year in which the company earns a 10% return on total assets. On level sales of around £3.9bn, pre-tax profit would rise to £614m and the company's value would increase by 25% to about £8.0bn. Plimsoll estimates this would improve overall financial strength by 17%.
That gap between today's 2% and a target 10% return is the real story. Taylor Wimpey does not need to sell more homes; it needs to make its capital work harder. Leaving London is one of the clearest ways to do that.
One point on staffing supports this. Headcount has fallen from 5,358 in 2021 to 4,496 in 2025, while sales per employee reached £855,000, almost double the industry average of £451,000. The company is already running lean.
The wider UK housebuilding sector
Taylor Wimpey is not alone. Plimsoll's latest House Builders analysis covers the UK's 1,870 largest housebuilding companies, and it paints a picture of a sector growing slowly with a sizeable minority under strain.
• Sales growth of 2.9%. Across the industry, sales have edged up by under 3%. That is modest growth at a time when the government needs output to rise sharply to reach 1.5 million homes this parliament.
• 236 companies at risk. Around one in eight of the firms analysed is currently flagged as financially at risk. Thin margins, rising build costs and slower sales rates leave less room to absorb a shock.
• 679 highly attractive acquisition targets. More than a third of the sector is rated a highly attractive takeover prospect. Expect consolidation, with stronger groups buying land banks and smaller builders that can no longer fund growth alone.
• 124 fast-growing threats. A smaller group of companies is growing quickly enough to challenge established players, often regional builders focused on the kind of smaller, quicker sites the majors are now chasing.
The industry benchmarks in Taylor Wimpey's report fill in the rest. The average gross margin is 13.3%, average sales per employee are £451,000 and the average salary is £63,000. The large listed builders comfortably beat these averages, but even they are seeing profits squeezed.
Taylor Wimpey's numbers fit the sector story. Sales are recovering, but costs, regulation and affordability are eating into profits. Builders are responding by chasing capital efficiency rather than volume, and that means favouring fast-selling suburban and regional sites over complex urban schemes. London's high-rise market is where those pressures are most acute.
Interestingly, Taylor Wimpey itself is rated "unattractive" as an acquisition target by Plimsoll. That mainly reflects its size, wide public shareholding and listed status rather than any weakness. It is far more likely to be a buyer than a target in any wave of consolidation.
The bottom line
Taylor Wimpey's exit from London apartments is a capital decision, not a vote of no confidence in the capital. With pre-tax margins down to 3.8%, returns on assets at 2% and cash halved since 2022, the company cannot afford to lock money into high-rise schemes that take years to deliver and face extra regulatory hurdles.
The Plimsoll data shows the same pressures across the industry: sales growing slowly, 236 builders at risk and hundreds more ripe for takeover. For London, the message is stark. Unless the economics of building flats in the capital improve, other major builders may follow Taylor Wimpey's lead, and the city's housing shortfall will only deepen.
