Taylor Wimpey Stock

Okay. Good morning, everyone, and thank you for joining us today. I'll start with some key areas of focus in trading and bring you up to date on what we're seeing before Chris takes you through the financials and capital allocation in more detail. I'll then return to cover the proactive actions that we're taking to protect margin and improve returns and the progress that we're making on executing the strategy we set out last year, which I think sets us up well for the current market.

So as you're all aware, the housing market backdrop remains challenging. Underlying demand remains resilient, but customer confidence is subdued. So our focus in the first half and my key messages today is on controlling what we can, sharp disciplined execution and a relentless focus on improving return on capital. In other words, we are carefully managing the business to protect value [ NOI ] while also preparing for a cyclical recovery.

Our teams worked extremely hard to deliver these results, and I'd like to thank them all and our subcontractors for their work and the commitment in the delivery. As I've set out here, the first priority is maintaining our tight grip on cost, and we are navigating the current uncertainty with decisive cost and efficiency actions across the business. I'll come on to these in more detail later. But for NOI, I'd just like to pick out a couple of examples for you. Through tight WIP discipline, we are driving enhanced efficiency with WIP per outlet down 6% year-on-year, which, as you know, from October is in line with our plans.

Our scale, rigorous approach and established partnerships have enabled us to identify further procurement efficiencies to offset some of the build cost inflation through retenders, rebates and e-auctions. Our second priority is continuing to drive outlet growth. As you've heard me say many times, we've been proactive and assertive in our planning applications over several years to unlock the opportunity brought by the recent planning reform changes. And you will see the benefit of this as a key lever for future volume recovery. In the period, I'm pleased to say that average outlets increased by 6% year-on-year.

And third, capital allocation. Our priority here continues to be maintaining a strong balance sheet to underpin our ability to deliver attractive returns through the cycle. You will have noted the change to shareholder returns this morning, revising our total payout to 4% of net asset value. Chris will take you through this shortly, but there's no change to how we allocate capital, but the housing market downturn has been more prolonged than anticipated and affordability pressures continue to affect demand and profitability expectations, which remain lower than when the current distribution level was set. More recently, uncertainty arising from the events in the Middle East has added to an already challenging backdrop.

Taken together, these factors have led the Board to conclude that a lower level of annual distribution is appropriate for the current environment and will give us greater flexibility and resilience through the cycle.

So despite the uncertain backdrop, on the whole, trading in the first half remained pretty resilient. I'm really pleased that during the period, we made further progress on outlets, one of our key priorities, operating from an average of 219 outlets in the period and opening 39 new outlets compared with 32 in the first half of last year.

Turning to sales. The first quarter was solid, though more subdued than the comparable period in 2025. However, from April, the market has been incrementally more challenging and uncertain given the conflict in the Middle East and also recent domestic political uncertainty. Our net private sales rate was 0.75 per outlet per week, about 5% lower than the GBP 0.79 in the first half of last year, whilst bulk sales remained around the same level. Private average selling prices increased to GBP 371,000, up from GBP 350,000 in the first half of 2025, mainly to do with mix.

The cancellation rate reduced to 14%. The order book as at the 28th of June stood at GBP 1.9 billion, representing 6,882 homes. So looking at current trading. As you know, the summer is a traditionally slower season for sales, and this is only 4 weeks' worth of data. But you can see that the net private sales rate per site is running 7% down on the same period last year, 5% down excluding bulk. Pricing, which has seen a gradual decline through the first half has stabilized in more recent weeks. Customer behavior is cautious, and they are taking longer to make decisions.

On a site-by-site basis, this means our focus is on driving more appointments and our regional teams are using targeted incentives where they genuinely support conversion rather than taking a blanket approach. And I'll talk you through this a little bit more shortly. Affordable housing providers remain quite constrained in the Section 1 and 6 market, so securing affordable housing delivery remains challenging. We are in a good place for 2026 affordable completions, but with the flexibility introduced by the ministerial statement in January, having a December 2027 delivery cutoff, the challenge remains.

We continue to press government for greater flexibility in type and tenure through cascade mechanisms to support the delivery of affordable housing. And with that, I'll now pass over to Chris, who will take you through the financial performance, cash flow and capital allocation in more detail.

Thanks, Jenny. Good morning, everyone. I'll start as normal with our first half financial performance before moving on to the balance sheet, how we're improving our capital efficiency, supporting cash flow and capital allocation and then finish with our outlook and guidance for the remainder of the year. As Jenny has outlined, market conditions remain challenging through the first half. Against that backdrop, the group delivered a solid first half performance. Group revenue increased to GBP 1.68 billion, supported by disciplined U.K. delivery, higher average selling prices and GBP 32 million of land sales, partly offset by lower completions.

Margins and profitability were impacted by the ongoing pressure from lower underlying pricing and build cost inflation. Gross profit was GBP 254 million, down 10% year-on-year, with gross margin reducing by 200 basis points to 15.1%. The reduction in gross margin was the primary driver of lower earnings in the period. Adjusted operating profit was GBP 130 million compared with GBP 161 million last year, while adjusted operating margin also reduced by 200 basis points to 7.7%. Our balance sheet remained resilient with tangible net asset value per share broadly unchanged at 117p and return on net operating assets measured over the last 12 months, also broadly stable at 10%.

Turning to U.K. performance. U.K. completions, excluding joint ventures, were 4,723, down 3.5% compared to half 1 last year, but ahead of the first half weighting assumptions we outlined at the start of the year and updated at the AGM. Average selling price, excluding joint ventures, increased by 6.7% to GBP 334,000. Private ASP increased by 6% and affordable ASP by 9%. Mix was the principal driver of these movements with a higher proportion of completions from the South and homes that were on average around 3% larger than last year. And these factors were partially offset by lower underlying pricing, reflecting ongoing market pressure. For the full year, we now expect the blended U.K. average selling price to be around 1% ahead of last year with affordable homes contributing approximately 21% of completions. Joint venture completions increased to 88 with our share of joint venture profits contributing GBP 4 million in the first half. We aren't expecting any net contribution in the second half, and therefore, guidance remains at GBP 4 million of JV profit for the full year. U.K. gross profit margin was 14.4%, down 180 basis points year-on-year, which will be explained on the next slide.

And this slide, which will be familiar to you, sets out the key drivers of the movement in U.K. adjusted operating profit margin versus half 1 last year. Overall, margin reduced by 160 basis points. The largest driver was the net market impact of 280 basis points, comprising around 110 basis points from lower selling prices and 170 basis points from build cost inflation. Starting with pricing, performance was broadly in line with the trends that we've highlighted since January. Following modest softening through the spring selling season, particularly in the southern markets, pricing has been more stable in recent weeks. Overall, underlying pricing on half 1 completions was around 1.5% below the prior year. Build cost inflation in the half was 2.5%. We continue to challenge supplier cost increases robustly and leverage our scale and procurement initiatives to mitigate inflation.

Conditions appeared to be easing during May and June, and we were actively discussing the removal of certain surcharges with suppliers. However, the subsequent increase in energy and fuel costs has slowed that progress, and we now expect surcharges to remain in place for at least the next few months. Land bank evolution has no impact on the half 1 margin as the contribution from newer land offset the reduction in older, higher-margin sites bought after the Brexit referendum.

The 130 basis point positive movement reflects the absence of the GBP 20 million charge for historical defective workmanship recorded in the prior year. Land and property sales reduced margin by 20 basis points and joint ventures provided a modest benefit. We remain firmly focused on the areas within our control, build efficiency, cost discipline, procurement, WIP management and disciplined capital allocation, which I'll come on to shortly. Looking ahead to the second half, the margin outcome will continue to be shaped by the balance between pricing, build cost inflation and volume delivery.

Underlying pricing is currently around 2% below prior year levels and has been stable in recent weeks. Build cost inflation is expected to increase to around 3% to 4% for the full year, reflecting the factors I've just discussed. Accordingly, both pricing and build costs are expected to remain headwinds in the second half. We will continue to focus relentlessly on procurement and cost discipline to mitigate those pressures wherever possible.

Turning to the balance sheet. A key message from our October strategy update was that growth would come from unlocking value within our existing land bank rather than increasing investment. The GBP 169 million reduction in land, net of land creditors over the last 12 months demonstrates that approach in action. With all the land required for 2027 already owned, we remain focused on improving capital efficiency while supporting future growth. The quality of our land bank continues to reflect many years of disciplined investment and asset management.

With a reported U.K. gross margin of 14.4% in the period, there remains plenty of embedded value across the portfolio. To give you some sense of this by way of illustration, our sensitivity analysis indicates that a further 5% reduction in prices today would result in an NRV charge of only around GBP 30 million. Work in progress is in line with our expectations at this stage of the year, but remains higher than where we ultimately want it to be. It reflects the second half weighting of completions, investment to support new outlet openings and certain legacy more capital-intensive sites.

However, as I'll show you on the next slide, we are making good progress against the actions that we set out last October to normalize that position. Debtors at the half year were elevated principally due to deferred receipts on land sales and BTR deals, and we expect that elevated position to unwind by the end of the year. Provisions have reduced over the last 12 months as fading remediation works have progressed. There was no material change in the gross provision in the period with only minor movements for discounting and inflation.

Spend in the first half was GBP 36 million, and we now expect around GBP 100 million for the full year, lower than previous guidance due mainly to delays in securing approvals and building safety fund reimbursements. Importantly, our expectation to complete all works in 2030 remains unchanged.

Before moving on to cash and capital allocation, I wanted to briefly revisit the commitments we set out at our investor and analyst event last October around improving capital efficiency. As we said at the time, improving returns is not dependent on a recovery in the market. It is fundamentally about improving the efficiency with which we deploy capital across the business.

Since October, we've continued to make tangible progress against the operational actions that underpin that strategy. We've improved WIP efficiency with WIP per outlet reducing by 6% year-on-year. We've continued to recycle capital from London apartment schemes and other infrastructure-intensive investments, releasing capital for redeployment into higher return opportunities.

We've increased outlet numbers by 9% while maintaining a stable short-term land bank, demonstrating our ability to generate more selling outlets from our existing land position. We're continuing to increase the proportion of smaller, more capital-efficient sites entering the business, which supports higher outlet density, lower capital intensity and improved asset turnover time. We've also reduced land bank years and lowered the capital tied up in land, further improving the efficiency of our capital base. I see this as encouraging early evidence that the actions that we set out last year are gaining traction with the business responding to pace to improve efficiency.

While the full benefits will take time to flow through into volumes and returns, the progress achieved demonstrates our focus on controlling the factors within our influence despite a challenging market backdrop. The actions we're taking today continue to strengthen the business, laying the foundations for improved asset turn, stronger cash generation and higher returns over the medium term.

Having shown the progress that we've made against our capital efficiency commitments, this slide illustrates how that translated into cash generation and capital deployment during the first half. We started the year with net cash of GBP 343 million and generated GBP 130 million of cash from adjusted operating profit. Consistent with the disciplined approach we outlined in October, we've been highly selective on land approvals and land spend during the period, resulting in a GBP 49 million reduction in land investment. We also invested GBP 108 million in work in progress, consistent with the operational priorities and phasing discussed earlier. As a result, the business generated GBP 52 million of cash from operations during the first half.

After tax, shareholder distributions and other cash outflows, we closed the period with net cash of GBP 169 million. The key takeaway is that we remain disciplined in how we allocate capital across the business. While the timing of cash generation will naturally vary between periods, our focus remains on improving capital efficiency, maintaining balance sheet strength and preserving the flexibility to deploy capital in line with our long-term priorities.

Turning to capital allocation. First of all, by way of context, there is no change to the strategy we set out at our investor and analyst event last October and no change to the capital allocation framework that underpins it. Our priorities remain straightforward and consistent. First, we maintain a strong balance sheet appropriate for the cyclical nature of the industry. Second, we invest selectively in land and work in progress for growth and long-term value creation, noting our clear focus on driving improved capital efficiency. Third, we understand the importance of cash returns to our shareholders and remain committed to delivering attractive returns through the cycle.

And finally, where capital is genuinely surplus to the needs of the business, we return that excess cash to shareholders. Those priorities remain unchanged. However, given the prolonged housing market downturn and in particular, the continuing uncertainty in the macroeconomic and political environment in which we're operating, the Board has determined it is now prudent to reassess the level of cash returns we are making. As you will have seen in this morning's announcement, we're updating our distribution policy from a total annual return equivalent to 7.5% of net assets to 4% of net assets. Before turning to the mechanism, I'd like to explain the basis for the Board's decision.

Whilst we're making good progress against our operational priorities, the current cycle is seeing a more prolonged downturn than we anticipated, exacerbated by the crisis in the Middle East. Consistent with our long-standing priority of maintaining a strong balance sheet and financial flexibility, the Board has concluded that a distribution level equivalent to 4% of net assets is the appropriate basis for shareholder returns going forward. This will comprise an annual ordinary dividend equivalent to 2% of net assets, supplemented by a further return of 2% of net assets by way of incremental dividends or share buybacks.

Cash dividends remain an important element of shareholder returns, but at current valuation levels, we see significant merit in complementing them with share buybacks. Overall, we believe this approach strikes the right balance between delivering attractive shareholder returns, maintaining confidence in the sustainability of distributions and preserving financial flexibility in a less supportive market environment.

Before turning to guidance, I just want to reiterate some of Jenny's comments about what we are seeing in current trading. Whilst underlying demand for new homes is robust, affordability remains stretched in a number of markets and customers continue to take a measured approach to purchasing decisions, which is reflected in the lower sales rate that we saw in the first half. Accordingly, we expect the headwinds from both pricing and cost that we experienced in half 1 to persist through the second half. While underlying pricing has been broadly stable in recent weeks, it remains on average approximately 2% below prior levels. At the same time, we anticipate build cost inflation on completions will increase to around 3% to 4% for the full year, given the continuing pressure from energy and fuel-related costs.

Conditions also continue to vary across the country with the South generally experienced a more challenging backdrop than other regions, given affordability pressures and a greater reliance on discretionary movers. So pulling this together, we're adjusting our guidance for U.K. completions this year to a range of 10,600 to 10,800 homes, which is the lower half of the range we provided in March. We expect blended U.K. average selling prices for the full year to be around 1% higher than last year, driven by mix and assuming an affordable share of approximately 21%. However, as noted earlier, we expect further pressure from underlying pricing, which is currently running at 2% down year-on-year compared to 1.5% in half 1.

Build cost inflation, as I called out earlier, is expected to increase from 2.5% in the first half to around 3% to 4% for the full year. Group net operating expenses were GBP 128 million in half 1 and will be at a similar level in half 2. We don't expect any net contribution from JVs in the second half, and therefore, guidance remains at GBP 4 million of JV profit for the full year.

Net finance costs are expected to be around GBP 25 million, GBP 5 million less than previous guidance. Net cash is expected to improve during the second half, increasing from GBP 169 million reported at the half year to around GBP 250 million at the year-end, assuming approximately GBP 100 million of cladding-related cash outflows during the year. So in conclusion, the market remains challenging, but our priorities are clear. We're focused on disciplined execution, improving capital efficiency, maintaining balance sheet strength and allocating capital responsibly. Those actions position us well to navigate current market conditions while continuing to execute against our strategy and create value for shareholders over the longer term. I'll hand you back to Jen.

Thanks, Chris. So I'll now turn to how we're managing the current uncertainty and how we're positioning the business to protect value now while preparing for a cyclical recovery over the medium term. So let me first step back and just put the current environment in context, looking at both demand and supply. On demand, sentiment, confidence and affordability continue to be affected by the global and domestic backdrop. So while there continues to be very high underlying demand, effective demand has been weakened. It's not all bad news as the consumer has proved pretty resilient and continues to transact, albeit they're very value focused. Mortgage availability remains good and lenders remain committed to the market.

On supply, there's been a little disruption due to the local elections. But despite this, we've been able to drive continued planning momentum and are pleased to see positive progress with planning and continuing commitment to positive determinations, especially by planning officers. There have also been some positive policy measures from government off the back of the Planning and Infrastructure Act, although we await the formal introduction of the National Scheme of delegation and await the NPPF redraft, which is now expected in September. Build cost is facing increased pressure because of knock-on energy surcharges, particularly in materials and mitigation is a key focus for the business, which I'll come on to in a moment.

The labor side has been more stable, and there's good capacity in the industry, though there are some signs of financial stress. We've spoken previously to you about the cumulative impact of regulation. The HBF recently estimated that these factors, together with the underlying build cost inflation have added approximately GBP 76,000 to the cost of delivering a new home since 2020.

In London, the figure is closer to GBP 98,000. These additional costs are now visibly impacting the viability of new sites, especially in areas of lower ASP or underlying ground conditions or infrastructure demands or Section 106 agreement requirements are overweight. This subject remains one we raise regularly in our engagement with government, and we will continue to do so. It's particularly important given the recognized economic multiplier effect of new housebuilding as well as the scale of the opportunity and job creation our sector brings to local communities and the support it provides for the wider supply chain. So the environment is not a straightforward one, but it is one we understand, and we are sharply focused on the areas we can control.

From a customer's perspective, affordability remains the key challenge to overcome as it has been for some time, particularly for the South and for first-time buyers. We're responding by helping customers navigate affordability through tailored incentives and our summer campaign, your home, your budget, your way, helps our customers understand the support available and to see a route through to homeownership.

We continue to generate a healthy level of site activity with a good number of appointments, although customers remain cautious. More visits are needed prior to reservation and as a result, time to reservation is taking longer. All in all, I'd characterize it as a buyer's market out there with listing levels near 12-year highs for this time of the year according to Rightmove. Our approach over the last couple of years, as you'll know, has been to prioritize high-quality leads as opposed to overall traffic, upweighting investment in the channels we have assessed as delivering this objective. We're applying an increasingly more systematic approach to sales, leveraging our customer database using targeted media spend to drive higher quality leads and applying incentives in a disciplined way to support conversion.

This is having a positive effect in driving customers to book appointments predominantly through our website with website appointments up 13% per outlet year-on-year. Overall, when we include all types of appointments, so that includes walk-ins and appointments booked by our sales executives directly, they're also up year-on-year in absolute terms. However, on a per outlet basis, the picture is pretty stable.

Right, there we go. Tight operational discipline and cost management are business-as-usual at Taylor Wimpey. But here, I want to give you a sense of what we're doing to drive this even further throughout the business. I'm really pleased with how the business has responded and I have a few examples to share with you this morning. Firstly, we're applying the lessons that we learned in the 2022, '23 energy price shock and have been quick to respond even before the cost pressure emerged. That included a surcharge model, forensic input scrutiny to challenge increases, seeking substitutions where appropriate and using procurement scale to mitigate the impact and of course, through our partnership negotiations. A second example is how we've been actively preparing for the building safety levy, which is expected to come into effect from the 1st of October this year in relation to both new and existing land assets.

Through considered action, so in effect, the submission of new initial notices for existing and pipeline sites, we've been able to mitigate these costs, ensuring that sites will not be liable for building safety payments until 2029. We are implementing tangible and deliverable savings through our value improvement program. And these aren't theoretical initiatives. They're site level actions that can be delivered quickly. So for example, as you know, taxation for landfill increased last year, and we're therefore driving savings in site waste and disposal costs using the Nexus ReGen digital materials exchange platform to identify reuse opportunities across our own national network. This is delivering meaningful savings on waste disposal costs as well as enhancing our sustainability.

We're working proactively with 15 key partners in high-value areas to identify new opportunities to drive value. So for example, rationalization and change of white good providers aligned with customer research. Individually, the improvement is incremental, but overall, it is meaningful and importantly, embedded in our mindset with the team driving operational excellence and a cost focus, which is now considered business as usual.

And finally, we're continuing to increase delivery from the standard house type range and standardized products and processes so that each improvement is repeatable across the business, levering cost and efficiency benefits. So that's just a flavor of some of the core initiatives underway. We are relentlessly seeking ways to improve the cost base of the business, and we'll continue to do so over the coming months.

So turning now to the actions that allow us to unlock value from the existing land bank and underpin future growth. We've continued to stoke the planning momentum we've created, and we currently have around 32,000 plots in planning for first principle determination. And there are 11,000 plots targeted for a set of planning application submission over the remainder of 2026, and that's over and above our business-as-usual activity. We converted around 3,000 plots from the strategic pipeline in the first half compared to around 1,000 in the first half of last year, showing some improvement on delivery as expected.

We also achieved a 72% increase in detailed planning commissions in the first half compared to the first half in 2025. And importantly, we own all the land required for 2027 completions, over 97% of which have detailed planning permission. The quality of our land bank has allowed us to be highly selective. And in the first half, we approved around 3,000 new plots. In terms of the current land market, though we remain highly selective, we are seeing a modestly improving pipeline, albeit from a fairly low level of activity. Where there are realistic landowners, there are some deals to be done and our financial resilience and market positioning means that we are well placed to benefit.

The focus on smaller, more capital-efficient sites with lower planning and technical risk aligns with our commitment to drive capital efficiency. And in the first half, the average site approved was 166 plots, and you can see on the graph here how that has moved over time. Together with planning commissions unlocking value from the existing land bank, smaller sites will support outlet growth without the need for new net land investment. I'm really pleased that despite the backdrop, we remain on track to open more outlets this year compared to last year and continue to expect higher average outlets in 2026 than in 2025.

To summarize then, we're firmly focused on the areas that we can control, including outlet growth, cost and improving return on capital, and I'm pleased to see the progress being made across these measures. We continue to support the government's housing ambition. And if we are to unlock delivery at scale, targeted action is needed to support both demand and viability. And we're committed to disciplined capital allocation in line with our long-established capital allocation framework, which demonstrates our commitment to prioritize -- to the priorities of managing a strong balance sheet, disciplined investment in the business and a commitment to returns for shareholders.

So thank you. And with that, we'll now open up for questions.

Aynsley Lammin from Investec. I think I've got 3 actually, please. Just first of all, on price and incentives, just kind of what you're doing there, what they're currently running at and the kind of slowdown you've seen over the last 4 weeks, is that, in your view, just the more summer kind of seasonal slowdown? Or have you increased price incentives as a reaction to that? And then secondly, I guess, related, just what you're seeing on mortgage rates, how big an impact is that having on kind of sales rates? And just on your strategy in the CMD, the kind of obviously saying that hasn't changed fundamentally. But when you look out for the medium term in terms of return on capital and the targets you'd expect to reach, has that changed given the backdrop of where you think the medium-term kind of returns for the business can get to?

Okay. So as Chris mentioned, we have seen a real sort of gradual erosion of on price over the half year, and we're now running at about sort of 2% down on year-on-year. There has been some stabilization over the last few weeks. But as you've seen, sales rates have also sort of shallowed off. In the last 4 weeks, I mean, we are now in proper summer season, and we would expect a slowdown, but it is perhaps disappointing to see it come off just quite as much as it has. But that, I think, correlates Aley to your question about mortgage interest rates. We have seen a move in mortgage interest rates within those weeks also. So if we think back to sort of Middle East sort of conflict, we saw a sharp increase in mortgage interest rates. I think through last year, we've seen some gradual improving, obviously, of interest rates, but we also had the benefit of the FCA and the PRA improvements, which for some borrowers, improve the multiple of income that they could borrow.

We saw interest rates easing a little bit, albeit some of the stress testing didn't maintain the benefits from the previous year. And then really on the collapse of the cease fire at the start of July, we've seen a sharper correction and interest rates rose again just in the last few days. So the mortgage rates are, I think, having an effect on affordability. And the sales teams would report that we're seeing people right on the very edge of affordability and that that's qualification is proving challenging for some.

The -- I mean, in terms of our CMD and the strategy, I think as we've said this morning, fundamentally, there's no change in that strategy. We've got an excellent land bank and the opportunity to leverage that as well as investing cautiously or highly selectively at the moment in smaller sites, I think will help drive our outlets and ensure that we're driving stronger sort of capital efficiency.

And overall, in terms of the medium term, clearly, the current conditions aren't conducive of one of the fundamentals that underpins the medium-term targets you think the regulatory -- offsetting of build cost inflation, including regulatory cost against house price inflation. And clearly, that's not the environment that we're currently operating in. So at this point, we still feel that the strategy is correct. There's the opportunity to get there, albeit it's probably moved out given the current climate.

Kate Middleton, Panmure Liberum. Three questions from me, if that's all right. So you've reduced WIP by 6% per outlet. I was just wondering if you see this coming down any further? And if you can maybe talk about the optimum levels that you see for WIP per outlet efficiency. Secondly, there's been a nice progression of outlets opening year-on-year. Just wondering how we can think about this one moving forward and if it will continue to progress at a similar rate?

And finally, the distribution policy, should we think about that staying at 4% moving forward in the medium term? Or is there perhaps any catalyst that could cause that to move? And if so, what might those be?

Okay. If I take the outlets and the sort of distribution policy and Chris, if we do the web, that would be helpful. We don't guide on outlets. And although we are seeing momentum in the planning environment, we are waiting at this point now to see what government's new sort of housing and planning policy looks like. We're very hopeful that the national scheme of delegation that will kick in from October will help ease some of the bottlenecks and planning resource issues that we've seen through the last few years. So I remain optimistic. And as you've heard, we continue to prime sort of the planning system to take the benefit of that. But that and how the land market operates really is what will drive sort of outlets overall.

You heard us say that we're in a good position for 2027 with all land owned for completions in 2027 and the vast -- well, 97% of it has detailed planning permission. So I feel that we're in as good a position for 2027 as we can, but there are a number of other moving parts that will contribute to outlets over the medium term. And in terms of the distribution policy, we believe that the revised annual return of the 4% of net assets strikes the right balance between continuing to provide an attractive level of shareholder return but given the group much greater flexibility and resilience through the cycle. I think NAV is still the correct way given that we're an asset-backed business.

And clearly, you've seen that we've made the decision that given the share price at the moment that there's the opportunity to include the share buyback on that. And we remain committed to delivering sort of sustainable returns for shareholders. In terms of catalysts, this is the best judgment that we make at the time, given the conditions that we observe. We're confident in the 4% that we've declared today, but the Board will review as they always do, the share and the dividend structure on a regular basis. So Chris, on WIP.

Yes. So okay, we reduced WIP per outlet down to 9.3 million. And you've heard me talk about sort of normalizing the WIP balance in terms of reducing the capital that's locked up in the London apartment schemes and also in the infrastructure-intensive sites. I think if you strip that out, we could get down to something like GBP 8 million per site. So that would be a medium-term sort of target to try and be helpful.

Allison from Bank of America. Only one question, very big picture. Do you have any comment or thoughts on the recent rumors on this potential renewed Help to Buy thing from the new leadership?

I mean, look, we will plan and run the business based on the environment that we see. I think they're just that at the moment, rumors. There is regular engagement, both from Taylor Wimpey and the sector. Given all that we see in the current operating environment, the risks that we see potentially to contraction across the sector for a government that's ambitious for housing delivery, we do think that they need to address demand and viability, as you heard from me this morning. So it's certainly something that we're leaning into. But I haven't heard anything substantive from the new government.

It's Charlie Campbell at Stifel. Two questions, please. Land market, I think you're suggesting that some land vendors are more realistic. But just wondering kind of how many and at what point -- how long it will take for the land market to adjust to current selling prices and current build costs? And then secondly, it seems that what you've been saying and others have been saying is that a lot of the energy has been dealt with through surcharges, which kind of gives the impression that if energy prices sort of come back, then build costs would come down quite quickly. Just wondered if that's the right interpretation?

Okay. I mean just dealing with energy quickly. We've been very deliberate and our teams have been really deliberate to ensure that we are marking this market increase in build cost as surcharge as distinct from underlying or other of the sort of variable inputs for exactly that reason, Charlie, that if we see energy costs coming back in again, that we can get those surcharges removed visibly as quickly as possible.

And I think as Chris mentioned, there was a period through May and June where we had started the discussion and some of the sort of material suppliers were talking about starting to reduce the surcharge because the barrel price of oil had come down. That has unfortunately been reversed with the sort of the recommencement of facilities. And so we're keeping a really close eye on those surcharges. That's exactly the approach.

In terms of the land market, there's always a difference between a transaction and whether that's the market or not. We've talked about being highly selective. I think it's fair to say that there was a noticeable pause across the sector through spring, real visible reduced bidding depth, so less active bidders in the market, but also a few contracts actually being completed.

Some parts of the market have become more realistic. I would say that landowners are often the very last to accept that things have changed, potentially hoping that there'll be a reversal on some of those costs. But we have noted more recently that the markets have become just a little bit busier. But I would again just check that, that's from quite a low base. And I don't really think that, that's showing an easier transaction environment. But what we are seeing is landowners and promoters possibly checking the market for value at an earlier stage, particularly if they're in the planning process and understanding really what sort of value they would be. a lot of reliance on deferrals and conditional structures at this moment.

And probably fair to say that landowners are really struggling, even if you took the more recent sort of build cost, really struggling to process the impact of those regulatory costs that have been sort of loaded into the sector. So land price adjustment, there's a number of elements that play into that. We would say, so the sector and our land teams, we're looking really closely at house price, what we're seeing absolutely current day in build cost, and we're looking at sales rate in a very known basis, landowners are often still thinking about a few years ago before some of these issues hit. So I think adjustments, we've learned, I think, over the last couple of years that adjustments in the land market take longer than they have done in other parts of the cycle.

Rebecca Parker from Goldman Sachs. Just 2 questions from me. Firstly, on appetite for bulk sales and what type of discounts you're seeing in the market at the moment? And then secondly, on operating costs, just noting that the guidance for the full year is up about 7%. Just wondering if you can provide some color on the key drivers there and then potential cost out into next year and where we could see some of those costs come from?

Okay. Chris, will you pick up the operating cost point? I mean in terms of bulk sales, we remain really consistent, Rebecca, in the way that we tend to look at them. We look at them on a project-by-project basis and trying to understand the benefit versus the potential discount on return on capital and being able to recycle WIP. Our bulk -- our activity in the bulk market has been very similar to what we saw in half 1 of 2025. And we tend not to do large multiyear sort of bulk deals very frequently at all. Discounts that are being reported in the market are between 15% and 20%. And I'd say we're not seeing anything different to that.

Yes. And just on the operating cost, the increase are driven principally by wage inflation. Also in this half, obviously, we've got with the full impact of the NI increases introduced in April last year, together with some additional IT investment and other inflationary increases.

And then just potential request.

Yes. Sorry, yes. Obviously, we -- as part of our business as usual, we look at constantly how to do things more cheaply. And I think that the focus this year has shifted somewhat into the things that we do and whether we need to do them and looking at our processes and our procedures and really more fundamentally at where we can get at cost. So yes, that's very much front of mind.

Emily Biddulph from Barclays. I've got 3, please. The first one was just on WIP in London on those infrastructure-heavy sites. Based on what's on the order book at the moment, can you give us a sense of where you expect that to be by the end of this year? Secondly, you said that price is down 2% at the moment, but it's been relatively stable in the last few weeks. I was just trying to remember what the phasing of price was last year. I seem to remember it weakened into the end of the year. So if price stays where it is today, does that mean that when we look at that margin bridge at the end of the year that for the second half, it will be minus 2%?

Or is there scope for it to be a bit better than that because the comp starts to become a bit easier? And then thirdly, just on the margin mix of sites. Obviously, you're doing a really good job of opening new sites. And you said at the end of last year that you didn't expect to get much margin mix help for this year. You did have a big step-up in numbers for next year, and it looked like the mix was going to be better. Presumably, that's still the case. Even if the sales rate continues to be weaker, do you still get that? Or does a weaker sales rate mean that sort of lower margin stuff kicks around for longer and it's harder to achieve next year?

I will take this.

Yes, yes. So in terms of the WIP and London and the infrastructure and specifically, you asked about the London sites, the 9 that I said, I think, in October that we had 270 million. We've said that, that's reduced down to GBP 220 million. I think actually, you'll start to see that there's further reduction as we get to the end of this year. probably of the same order of magnitude of reduction that you've seen over the course of the last year.

But -- and I was pretty clear about this in October as well, that's going to fluctuate. So it will come down a bit more and then it will go up a bit. And it will take until 2029 for us to literally shift all of that GBP 270 million. In terms of the second question, and Emily will need to like correct me if I'm interpreting your question wrong. But I think really what you were saying is in a scenario where pricing continues to be on an underlying basis, 2% down for the rest of this year, what would you expect to see in the margin bridge at the end of the year?

And if the first half margin bridge is at 1.5%, and we stay at 2% for the rest of the year, then I'd expect the margin bridge at the end of the year to be somewhere between 1.5% and 2%, does that help -- and then sorry, if you remind me what the last question...

The margin mix on site. The margin mix -- the guidance [indiscernible].

The margin with a guidance from the sector.

Yes. I think it's the margin evolution through the land bank.

Right. Yes, yes, yes, sorry. So I mean, when we set the medium-term targets in October, obviously, we assumed that house price inflation, build cost inflation, as Jenny said, was broadly offset. And obviously, the backdrop has been less favorable. But I think it's important to remember that the medium-term targets weren't just set on that one assumption. They're underpinned by a much broader sort of operational plan, outlook growth, improving capital efficiency, reducing with evolving land bank. And you're specifically asking about that evolution of land bank element.

Yes, I mean, from October, you saw that chart, which shows you the different vintages of land and how they sort of play out over time. Absolutely, we would expect that evolution to continue. I think you've seen last year, the land bank evolution was a small negative. In this period, it's flat. It's probably going to stay pretty flattish this year, and then there should be the start of small levels of improvement. But as I emphasized in October, it ramps up towards the end because that is the nature of how the evolution plays out. That answer your question.

Sam Cullen from Peel Hunt. I've got 2 also. The first one is on, I think... Chris, there's a comment in your section about London being -- or South rather being a bigger part of the mix. Does that reflect just the sites coming through? Or is that a conscious push to really get through the London apartment as quickly as possible, given North has been generally in the south for the last year or so? That's the first one, one at a time or both. Okay. I'll do the second one. And then I guess a year ago, we were here and the distribution policy was reliable and sustainable. And clearly, it's been nearly cut in half. At the same time, we're still investing for a cyclical recovery in the OpEx base. I'm just trying to square the 2 parts of that, that the dividends come down, but the OpEx base is going up by percentage increases this year? And is there scope for more rationalization within the business?

Okay. I mean I think, first of all, in terms of London, the South and being a bigger part of the mix, there's an element of the sites there are sort of mature, but we also have been trying to drive out some of those sort of apartment schemes. So there's a balance. And you heard us last year talking about the impact of some of the bulks that we had taken on that basis going into the order book. So that's probably a fair characterization. In terms of the sort of cost savings or where we are sort of OpEx, and I think that Chris has already addressed it, we are driving for savings and to really ensure that we are driving the most efficient business. But we are also mindful of the opportunity for recovery and want to make sure that we're not cutting into bone -- or taking out parts of sort of the business structure that will actually allow us to take best advantage of sort of the cyclical upturn.

Okay. Well, thank you for your questions this morning. It's much appreciated, and thank you for coming out and a sunny summer's day. We'll see you all again in November. Thank you.

Hello, everyone. Thank you for attending today's trading update call. My name is Ken, and I will be your moderator today. [Operator Instructions].

I would now like to pass the conference over to our host, Jennie Daly, to begin. Please go ahead.

Thank you, Ken. So good morning, everyone, and thank you for joining the call. As usual, I'm joined by Chris Carney. So I'll start with a few quick words before opening up for your questions. You'll have seen from the statement that trading in the year so far has been steady, only slightly down on a strong comparator at this point last year. Nevertheless, we are not immune to the uncertainty and challenges posed by the macro backdrop, and I'll talk about this shortly.

Suffice to say, our excellent sales teams remain focused on driving our database and supporting customers through their buying journeys. Our net private sales rate for the year-to-date was 0.74 per outlet per week compared to 0.77 at the same point last year with a cancellation rate of 14%. Excluding bulk sales, our net private sales rate for the year-to-date is 0.72 per outlet per week compared to 0.76 at the same point last year. Our total order book stands at GBP 2.2 billion compared to GBP 2.3 billion at the same point last year, representing around 7,700 homes compared to around 8,200 homes.

The pricing environment has been more challenging in recent weeks, particularly in the South of England, where affordability is more stretched and overall pricing in the order book is around 1% lower year-on-year. You'll recall that at the start of the year, we talked about a proactive approach, particularly in London, where we are working our way out of certain apartment schemes. And it's fair to say that some of this pricing weakness reflects decisions taken here to make sure we keep recycling capital in line with our strategic goals. Elsewhere, pricing is softer with some geographies, particularly in the North being more resilient than others, as you would expect.

Overall, and encouragingly, new customer visits to sites and engagement remains pretty consistent throughout the spring selling season, helped by increased sales and marketing spend. As we discussed at full year, we are seeing customers visiting sales centers multiple times before making buying decisions. And given the outlook for prolonged higher interest rates this year, they are deal and incentive focused. Cancellation rates to date also remain consistent with recent experience. Another area of focus given the backdrop is build costs.

In terms of our suppliers, as we said at the full year, we've negotiated strongly on contracts for this year with some success, but are seeing increasing requests for price increases and surcharges due to rising energy and fuel costs as a result of the conflict. In that context, and it is still relatively early in the year, the outlook for build cost inflation in 2026 is now perhaps more like low to mid-single digit rather than the low single digit, I talked about when I spoke to you at our full year results.

Of course, we continue to scrutinize all supplier requests closely and work to defer and mitigate increases where possible. So it is hard to call it right now. The duration of the conflict will be a key determinant, but this is what we're seeing currently. And of course, we will keep you updated as we move through the year.

We're making good progress with the share buyback program. And as of the close of business on the 24th of April 2026 have purchased 39 million shares, equating to GBP 34.9 million of the planned GBP 52 million, which we continue to expect to complete in the first half. Pleasingly, we continue to see good progress on planning and are prioritizing outlet openings. And in the year-to-date, we operated from an average of 219 sales outlets compared to 208 for the same period last year and are currently operating from 218 and on track to open more outlets in 2026 than in 2025.

We are taking a highly selective approach to land buying given the backdrop and have approved around 1,000 plots in the year-to-date compared to around 1,700 plots at the same point last year. But our strong land position gives us some flexibility here, and we will see how market conditions evolve going forward. When we set out our guidance for 2026 at the prelims, we were very clear that it did not assume any impact from the situation in the Middle East. At that point, it was an emerging event with a high degree of uncertainty around how it might develop. Since then, it's fair to say that market conditions have become more challenging.

Bringing that together, while we're not setting revised guidance today, we are being open with you about what we're seeing on the ground. For the first half, we now expect U.K. volumes to come in slightly ahead of our previous half 1 guidance. That said, the pricing and cost pressures I mentioned earlier more than offset this benefit. So we now expect half 1 profitability to be slightly below our prior expectations.

The increased uncertainty means that there are a wider range of potential outcomes for the full year 2026 than we were previously planning for and a lot will now depend on how long the conflict persists and the implications that has for both interest rates and consumer confidence. We will update you further in the interim results when the outlook for 2026 will be clearer.

For now, we are facing into this uncertainty, laser-focused on keeping a tight rein of what we can control, staying close to the customer, making proactive choices where we believe it's the right thing to do and tightly managing costs. And I want to thank our teams in this regard for their strong operational discipline.

We remain confident that we have highly experienced teams in place, great product, excellent land position and the right strategy, and we will remain agile to respond to changing conditions to optimize performance in all markets.

So thank you for that, and I'll now open up for your questions.

[Operator Instructions]. We have our first question from Carlos Caburrasi from Kepler.

Just one from my side. And apologies because I know you said you don't want to speak about guidance. But I mean, in today's trading update, you have not reiterated the full year completions target, which I mean could raise some concerns given the current macroeconomic backdrop. And at the same time, you've said that pricing and build cost inflation will be worse than what you were previously expecting. So I mean, can you please shed some light on the potential impact this could have on the GBP 400 million operating profit target?

Thank you, Carlos. I'll hand over to Chris.

Yes. Thanks, Carlos. So we're not setting revised guidance today. When we set out our 2026 guidance at the prelims, as Jennie said, it assumed no impact from the situation in Middle East. And I can understand there might be a bit of frustration by this, but uncertainty has clearly increased, which inevitably means a wider range of potential outcomes. But we are trying to be helpful in the statement as well. So pricing in the current order book is around 1% down year-on-year.

In January, we said it was down about 0.5%, which implies that the pricing on more recent sales have softened a little further. And on that basis, the current run rate pricing is around 1.5% down weighted towards the South. And from here, the direction is hard to call with several moving parts in play.

On build costs, we previously guided to low single-digit build cost inflation for 2026, so say 2% to 3%. That's clearly moved up, and we're now thinking around the 4% for the year as a whole. Given the level of volatility, it could be higher or lower, but that gives you a sense of how we are thinking about it.

And then on volumes, just to step back, our net sales rate in both 2024 and 2025 was 0.75. When we set the 10,600 to 11,000 U.K. volume guidance range at the prelims, we assumed a rate slightly below that at the bottom end and slightly higher at the top end. But the volume guidance wasn't just driven by sales rates alone.

We started the year with a smaller order book and the key offset was an expectation that higher outlet numbers would more than offset that and allow us to grow volumes through 2026. If you look at the year-to-date performance in the statement, the sales rate, I think, is around 4% behind a strong comparative from last year, while average outlets are higher. So in combination, we're broadly tracking in line with our expectations.

That said, since we set the guidance, both interest rates and mortgage rates have increased, which has weighed on affordability and customer confidence. And cancellation rates are actually pretty good, actually lower than last year, likely reflecting customers with mortgage offers secured pre-March, proceeding with a decent amount of urgency.

We have our next question from Will Jones from Rothschild & Co Redburn.

Maybe 3 for me, please. First, you described as a steady-ish sales rate, but could you just help us with how that pattern has evolved in April and any differences you may or may not be seeing around lead indicators and inquiries and visits and the like?

Second, on pricing really just to confirm that there's no particular change to the pricing picture in the Midlands and the North. And any sense perhaps if you can, on what's left to do on London apartments?

And then on build costs really just what communications you've had so far from manufacturers? And does the low to mid-single digit allow for kind of formal price increases being agreed rather than just the delivery surcharges you've seen so far?

Okay. Thanks for that, Will. I'll take the first 2, and then Chris will pick up on the build cost. Yes. So I mean, we talked about sort of customer engagement remaining resilient. So we have seen good levels of inquiries. It's notable that appointments in particular, have held up really strongly. I did sort of make it clear in the narrative that we've invested quite strongly in sales and media spend. So that needs to be factored in.

What we are seeing and a bit of a repeat, but maybe more so of what we said at the full year, customers visiting sites multiple times. There's a high level of inventory. I think it's about 11-year high inventory across the market. So there's a lot of choice. There's obviously a lot of macro noise. So customers are cautious, and we can see that flowing through the GFK. So that's really where that sort of price weakness, particularly weighted to the South and London is coming in.

So forward indicators generally held up fairly well. We've seen a bit of a drop off in recent weeks. It's hard to see through that. Easter was earlier this year than last. We tend to see a bit of a dropoff in the weeks following Easter, aligning with school holidays. So modest drop-off, but really now seeing how that develops in the coming weeks.

But I would say around the sales pattern that we've seen in the last few weeks has probably been a bit of softening, but gradual. And again, not unusual given where Easter has fallen at this point. Really, we'll see more in the weeks ahead of us.

Around sort of London apartments, I mean, we've been talking about that for a while. And Chris last year in October talked about sort of the unwind and that, that was sort of run out to 2029. So we are on exit. We haven't invested in London for a long time. But clearly, the complexity of the schemes, some of the delays that we've seen with BSR and other things have really elongated sort of developments there. London is effectively unwinding. It is a diminishing part of the business and a diminishing part of the land bank, but it will take some time for us to exit. And around the Midlands and North, they have remained resilient. There are some pockets of weakness on a location-by-location basis, but they're holding up pretty well.

Yes. And on build costs, at our last update, we were feeling reasonably comfortable with how we manage build cost pressure in the early part of the year. Since then, we've seen a shift, as you might expect. We've received a significant number of surcharge and price increase requests from across the supply chain, driven primarily by higher fuel and energy costs. And the proposals range from low single digits to, in some cases, high teens percentages.

Now our default position has been and remains to resist surcharges. We require suppliers to evidence genuine underlying increases to their cost base, and we robustly challenge both the timing and content. Now we use our scale and our long-standing relationships to make it clear that costs have to move down as well as up.

But that said, we also have to be realistic. And where suppliers are being transparent and are sharing the pain and are prepared to share upside as conditions normalize, then we're prepared to engage constructively. And it's against that context that we're now sort of indicating that the build cost inflation for the year is higher than our initial expectations.

We have our next question from Aynsley Lammin from Investec.

I think I've got 3 actually. Just going back on the kind of guide your comments that you said were quite helpful around pricing and costs. I mean is it -- is my math correct, if I was to assume kind of where we were at the full year results and the incremental news you said today on weaker pricing and the cost inflation, that it's kind of around 150 to 200 bps hit to margins back from where we were expecting them to be a few weeks ago when you had the results. Would that be right? So the EBIT of GBP 400 million would be down, call it, GBP 70 million or so or 18% to 20% cut from the GBP 400 million, if we just assume what's changed on pricing and cost inflation at this point and the expectation for the full year? That's the first question.

Second question, I just one, are you taking any cost out kind of reacting to what you're seeing on build cost inflation and what looks like probably a slower market? And then just any comment around kind of cash, how you're managing that and what your expectation is for the full year based on your new kind of view of where margins and profits go?

Thanks, Aynsley. Well, I'll ask Chris to take sort of your first and third sort of questions on the sort of margin and sort of cash. But on cost out, look, we're a really disciplined business. We run a sort of a zero-based budgeting sort of philosophy. We have a history of taking swift action when market conditions change.

We are sort of as ever focused on sort of cost management and value improvement right across the business. At this point, we're not signaling any immediate sort of structural cost action, but we are sort of focusing on driving those material cost reductions and the engagements that Chris talked about with the surcharging and a really sort of incremental way. We're looking at optimizing the opportunities from our logistics business, and we'll focus on sort of a range of other sort of simplification improvements across the business. So really sort of digging in there.

Yes, Aynsley. And on guidance, look, the reason we're not giving in your guidance today is simply that there are just still too many moving parts to give you a number that we have confidence in. So our focus right now is on mitigating downside where we can and understanding how these uncertainties translate into outcomes. And we'll be in a much better position to do that by July, and that's when we intend to give you more color.

Sorry, just following up on that, Chris. So just following up on the kind of what you've said today compared to what you said at the beginning of the year, though, is it correct to assume that it's kind of an extra 1% on price erosion and kind of, let's call it, 100, 120 bps of erosion due to the higher assumption around build cost inflation. I mean, is that the right way to think about it? If we look at -- start with the GBP 400 million of profit full year guidance, and then we kind of expect -- we calculate today roughly 200 bps hit to margin on what you've said incrementally today. Is that fair?

So Aynsley, when we give guidance, it's really important to us that it's meaningful. And with the range of outcomes still very wide and evolving, what we're saying is July is the right point to update when we've got better visibility.

On cash, the business remains in a strong balance sheet position. We guided to net cash at the half year to be in a range of GBP 0 to GBP 50 million. We are fully sold for the first half. So assuming those sales rates convert to completions in the usual manner, I'd expect to be towards the top end of that range. Probably a bit less land spend, lower land sales receipt than anticipated, but those offset to some extent.

We have our next question from Zaim Beekawa from JPMorgan.

First one just on the incentives. Can you give an indication of where we are now? I think you were around 6% at the sort of full year results.

And then secondly, on the -- on bulk, is there a level that you had assumed for the year-end? And how do you think about that evolving?

And then thirdly, I sort of know you mentioned lower land spend, but I guess I echo some of your peers have spoken about reducing activity in the land market going forward given the outlook. Is that something you think you'll follow in a meaningful way?

Okay. Thank you. From an incentives, yes, you're right. At the prelims, we said 6%. I think that we're just a nudge above that at the moment. Regarding bulks, our sort of philosophy and approach on bulks really hasn't changed. In the sort of the year-to-date, it's slightly ahead, but actually really a relatively sort of low number. They're hard to plan forward given the sort of the sickness of that market, and they're also very sensitive to interest rate movements as well. We do have sort of a few perspective, but really, they're not done until they're done.

On land, I've talked about being highly selective. We're obviously monitoring events on the macro and monitoring the land market sort of carefully at this stage. You can see that our approvals year-to-date are down, and that's sort of being selective around where we are willing to invest at this point given all of the moving parts that we're talking about this morning.

We have our next question coming from Alastair Stewart from Progressive Equity Research.

Just is it possible to give a bit more detail on the London apartments position? I know Will asked about it earlier. For instance, can you give a rough idea of the outstanding number of the -- number of outstanding apartments roughly on discounts, have you contained these to within single digits? Are the apartments clustered around any specific areas? Are there any 1 or 2 big developments? And who are you selling to? Is it bulk investors or a mix with individuals?

Okay. I mean I think the thing that I'd say about London apartments is to stand back to start with and look at what the sort of the dynamics of the London market are. There's a really high stock of availability in London right across both new and existing markets. Affordability is constrained. We have the sort of post Help to Buy sort of sense of that equity supported 40% that really supported affordability.

There's overlay of investors effectively selling out or seeking to sell out of the market, both as a response to increasing tax sort of issues on a personal level and then a degree of sort of the rental reform sort of act flowing through. And I think it's also fair to say that there's a bit of a sentiment sort of overhang from sort of post grant [ fell issues ] around planning, just that's leaving sort of the apartment market sort of feeling sort of very, very heavy sitting in the market. So that's the backdrop that we're looking at in London.

As I mentioned, we have a number of apartments schemes sort of they're dotted around. So in terms of concentration, Alastair, I don't feel that we're overly exposed to one market. We've got good distribution. They would be in areas that you and I would have considered to be sort of good prospects. And we're working our way through them.

But as I said at the top of the Q&A, it will take a few years to unwind it entirely. There's no sort of response to a specific operator or sort of specific actions by others. We're really following a market that is sort of under pressure for price. So I don't feel that we've got a specific sort of issue. It's really just how the London market is operating. I mentioned that -- and I think it is important that you understand what the environment is like there. But we're not sitting on our hands.

We are being active, and we're making those proactive choices, I think, consistent with a strategy of redeploying our capital. So we are sort of taking sort of price action in order to move that stock on. There's a mixture of some bulks, but also private sales that we're playing through. So it's really the amalgam that we're leaning into today. And I'm not really going to get drawn into specific sort of numbers, but I think I've given you enough of a sense of...

Just one specific point you brought up. Did you say overhang of the 40% you mean the London Help to Buy scheme? Is there an overhang? And can you just give a bit more color on that? I hadn't heard that mentioned before.

Yes. It's really just in terms of sort of the overall sort of change in affordability that's happened with the withdrawal of sort of the Help to Buy support, which was significant in London has left affordability really very, very constrained.

Did I mishear you when I thought you said there was an overhang. Is there a glut of people who bought under Help to Buy and wanted to move -- London Help to Buy and wanted to move on, but couldn't because they're facing some form of negative equity. Am I misunderstanding you there?

Well, I'm not making any comment at all on negative equity answer. Look, it's really a sense that affordability in London has been supported for a number of years with Help to Buy. And in the absence of that, there's now an increasing number of sort of purchases that really just can't make the stretch on affordability.

We have our next question coming from Chris Millington from Deutsche Bank.

I'd just like to explore this pricing point a little bit more first. I mean, perhaps you could provide some color about when pricing starts to go backwards. I vaguely remember that at the start of the year, you said you were 0.5% down on the order book, but you caught it up, I think, by kind of spring time. So it suggests there's obviously been quite a lot of incremental movement. And perhaps you could also just comment on pricing about whether or not the trend has been deteriorating over time, i.e., it's been declining month-on-month. That's number one. Sorry, it's a bit long.

Next one, Chris, you mentioned H1 is likely to be worse than guidance. Can you just remind us what guidance was and what has changed there? And perhaps if you could just link into that, under what circumstances would margins rise from H1 to H2 because I think there was quite a big movement in the second half.

And then look, finally, and you probably won't like me asking this, but just a final question on your thoughts around distribution policy still if we are looking at profits, which are, again, 20% lower or so.

Okay [indiscernible]. Shall I start with half 1 guidance and distribution, then we go back.

Yes.

So just to recap what we previously said on half 1 performance, Chris, I think in January, we flagged that 2026 volumes would be more second half weighted with around 40% in the first half. Then in March, when we updated, we said half 1 operating margin would be lower than half 1 last year being 2025, reflecting lower pricing in the order book, ongoing build cost inflation and that second half volume weighting. And at that point, we estimated roughly 30% of the full year operating profit being delivered in half 1. So that 30% of the GBP 400 million. So the half 1 profit guidance was effectively GBP 120 million.

Since then, U.K. volumes are actually tracking slightly ahead of our previous half 1 guidance. However, as today's update shows, pricing pressure and build cost inflation have both been a bit stronger than we anticipated. I think it's worth noting that consistent with standard industry practice, when we assess cost to complete at the site level through our regular evaluation process, any increase in cost to complete is spread across all the blocks on that site from the first legal completion in the period through to the final completion. And that means homes legally completing earlier in the year will still bear their proportionate share of the updated site cost to complete, even where the plot itself was largely built complete before any supplier surcharge or price increase takes effect.

So whilst half 1 volumes a little bit better than that sort of 40% estimate, the combined pricing and cost pressure mean that half 1 profitability is now expected to be slightly softer than we previously anticipated.

And then in terms of capital allocation, obviously, a fair question. What I would say is the business is in a good position with a strong balance sheet and low adjusted gearing. We're holding our AGM later today and the proxy voting shows very strong support for the payment of the 2025 final dividend in May. And as we have said previously, we keep our distribution policy under regular review, but nothing has changed in terms of our approach or our priorities. And the assessment of the 2026 interim dividend will take place in the coming months as usual, and we will remain disciplined on that.

We have our next question...

We have some pricing questions that we didn't get to. So I think it was just a little bit more pricing color on the timing. So yes, so you're quite right, we entered the year this year. And in January, we indicated that pricing was in the order book down 0.5%. That then rolled forward to the prelims. And in that period, pricing -- net pricing was broadly flat. And I think that's what we were very clearly saying at that update.

And what we've seen since then is a gradual sort of deterioration in pricing as consumer confidence has sort of weakened and many our customers have just been more interested in incentives and the deal that they can secure. And what I should say as well is all of these decisions are made locally on a site-by-site basis.

So what we're aiming to do is drive the best return that we can from each one of those assets, and that's a balance. We've got some locations generally more towards the north of the country where we are seeing a reasonably resilient market. And that strength allows a slightly different approach. And then as Jennie has outlined, in the South, that is much more stretched with affordability and so much more pricing pressure down there. So yes, that's the color, I think.

We have our last question coming from Rebecca Parker from Goldman Sachs.

I was just wanting to go back to this pricing discussion. What is attributable to in London? And have we seen any of the London, I guess, worsening of pricing come through after your full year results? And what can we kind of see as underlying pricing...

Thanks, Rebecca. Yes. Look, I think there are sort of 3 parts to this sort of pricing story. And I would say London, where we are seeing very price sensitive. I gave you sort of earlier on the Q&A, some of the building blocks of that very high stock, quite a significant amount of sellers across new and existing markets. So the London specific market is very price sensitive. That's more than the sort of the wider Southeast and South.

And then as Chris has said, also, we're seeing more resilience the further north we go. So there is a London weighting to that pricing element.

And then just wondering if you're seeing any other inflationary impacts outside of those supply increases maybe on your admin costs or on labor costs?

So at the moment, the sort of the build cost sort of inflation story is really focused on materials. We're not seeing sort of movement on the labor side of the equation. We're still in a relatively sort of low volume environment from a supply chain perspective. And we would -- we're not hearing any specific signals around labor costs at this point, but it is worth noting.

Thank you. I can confirm that there's no further questions.

Okay. Well, thank you very much for your time. I understand that it's a busy morning this morning. And Chris and I look forward to seeing you at the half year results on the 31st of July. Thank you.

Thank you very much. That concludes today's call. Thank you for your participation, and you may now disconnect your line.

So good morning to you all. We're going to start nice and sharp today because I know it's a really, really busy results day. But before I do, and it has become usual practice, we have members of our group management team with us here today and also our first newly appointed Customer Experience Director, Maria Sebastian. So Maria, give everybody a wave so they know who you are. And we will -- hopefully, you'll have the opportunity to catch up with Maria later this morning.

And while not -- there is Maria. Actually, you missed your moment, Maria. So here is Maria, our Customer Experience Director. And while not here today, I'm also pleased to say that we have appointed a new Divisional Chair for the London and Southeast, Tom Pocock, formerly of Barclays. And Tom will be joining us soon, and you'll no doubt meet through the course of the year. Right.

Let's get started. So I'll start with some highlights on 2025 and the delivery of the medium-term targets we set out last October. And Chris will cover 2025 performance in more detail and turn to guidance. And then I'll update you on how the spring selling season is playing out and how we are driving the business forward with those medium-term targets firmly in our sights.

There we go. So this morning, you'll hear our strategy for driving returns in what has been a challenging year for the industry. Against that backdrop, we delivered 2025 volumes in line with guidance, growing completions by 6% with new outlet openings up 29% in the year, ending 2025 with 219 outlets ahead of expectations. The planning activity we created and stopped over the last 3 years has gained momentum through the year and is now delivering both in applications -- results, sorry, in both applications submitted, but more pleasingly, in the rate of permissions granted. And this is ultimately the basis for future outlet openings. And you'll hear that we remain very confident in delivering average outlet growth year-on-year.

Another key focus is utilizing our strong existing landbank and increasing capital efficiency. Chris will speak more about this. It's not something that happens overnight, but we are well on that journey. Our strategy and the actions that we've been taking will drive improved returns, both in terms of margin and return on assets in the medium-term. We have a continued focus on cost discipline, grinding out cost whilst protecting value and balancing the medium-term strategy commitments. And while the housing market remains tough, we remain confident in this plan that is in our control and deliverable. And you'll hear more about this during the presentation. However, our outlook does not incorporate potential impacts from recent events in the Middle East that may arise for the U.K. economy and our business given the early stages of development.

And finally, you will have seen that we've added flexibility to our capital allocation. Chris will talk you through the detail, but suffice to say that we remain confident that the unchanged quantum of net asset value-based returns remains appropriate, but do see benefits for shareholders and having more flexibility by adding the potential for a buyback element to our ordinary distributions.

So this slide will be a bit more familiar to you and gets a bit more into the guts of our 2025 performance. I won't run through them all, but I'll just pull out a couple of the highlights. We delivered a robust sales rate, which I think attests to the quality of our product and locations and the efforts of our teams.

Turning now to landbank. You can see that our landbank has come down slightly as planned as we seek to reduce landbank years. This is a key objective for us given the strong landbank that we hold, though we will do so principally by growing volumes. We've continued to prioritize customer scores and build quality as part of our commitment to operational excellence. We have a high customer score comfortably above the 5-star threshold under the new survey criteria, and our build quality continues to lead the sector. I'm delighted that for the second consecutive year and the third in 5 years, our Taylor Wimpey site manager was awarded the Supreme Award in the NHBC Housebuilders Award. This year, congratulations go to Lee Dewing of our North Yorkshire business.

So you'll have already seen most of the key numbers on the slide through the trading statement, but I'll just highlight the outlet chart, which I think illustrates the progress that we are making in outlet openings. We opened 71 outlets last year, 29% up from 2024 with good progress year-on-year. There's some good momentum here, and we remain very much on track. We expect to open more outlets in 2026 than we did in 2025 and remain confident in growing average outlet numbers year-on-year. I think it is worth reminding you what we said about our approach to outlets. We have a strong single brand, and we mostly run our sites as single outlets. So this increase in outlets represents real growth in new markets.

So I'll now hand over to Chris to take you through our performance and guidance in detail.

Thanks, Jennie, and good morning, everyone. As usual, I'll take you through the financial performance for 2025, a year in which the group delivered a robust set of results despite a challenging market backdrop. Our disciplined operational focus, the consistent execution of our strategy and the continued progress in planning and outlet openings underpins the financial resilience you'll see across the next few slides.

So let me begin with the headline financials. Group revenue increased 13% to GBP 3.84 billion, supported by growth in the U.K. completions, resilient private pricing and a stronger contribution from land sales. Overall, a very good performance in a year where second half sentiment softened. Gross profit was slightly higher at GBP 658 million with gross margin stepping down to 17.1%. This movement is consistent with the factors that we've been flagging throughout the year, modest build cost inflation, slightly lower opening order book pricing and the impact of landbank evolution.

Adjusted operating profit was GBP 421 million, up 1% year-on-year, delivering an adjusted operating margin of 10.9%, and I'll come back to margin performance in more detail shortly. PBT and adjusted EPS were both lower year-on-year, reflecting higher net finance costs. And finally, return on net operating assets edged up to 11% with improved asset turn more than offsetting the margin headwinds.

Turning to the U.K. We completed 10,614 homes, excluding joint ventures, up 6.4% year-on-year and in the middle of the guidance range we set a year ago. Private completions increased by 7.7%, while affordable completions increased by almost 2%. Affordable represented 21% of total completions, and we expect a similar mix of around 20% to 21% in 2026. The blended U.K. average selling price was GBP 335,000 with the private average selling price at GBP 374,000, both about 5% higher. This reflects a greater proportion of completions in London and the South.

Underlying pricing was positive in the North and became progressively softer as you move down the country, but overall remained reasonably resilient. As we entered 2026, underlying pricing in the order book was roughly 0.5% lower year-on-year, primarily due to those late year book deals in London that we highlighted in the January trading update. After taking that into account, we expect mix benefits to support an increase in the 2026 blended average selling price of around 2% over the GBP 335,000 reported for 2025. Adjusted U.K. operating profit remained steady at GBP 369 million, while margin softened to 10.1%.

On the next slide, I'll walk you through the main drivers of the 1.4 percentage point operating margin reduction. So in 2025, we saw modest market-driven pressures from both pricing and build cost, which together reduced adjusted operating margin by 110 basis points. On pricing, the pressure came from the opening 2025 order book and the London bulk deals, which contributed to completions in 2025 and formed part of the order book for 2026. Build cost inflation was about 0.5% in half one and 1% for the year overall, driven mainly by materials rather than labor.

The underlying market rate was slightly higher, but our supply chain self-help initiatives and increasing usage of our new house type range helped offset part of the pressure, and that work will continue into 2026. Landbank evolution was also a factor as we continue to trade out of older higher-margin sites acquired after the Brexit referendum. We still expect this to normalize and then become a positive contributor. And as we discussed in October, that improvement will start in 2027 and become more meaningful in 2028 and 2029.

As we said in January, land sales were particularly strong in 2025, enhancing our group margin by roughly 60 basis points, a similar benefit to 2024. However, as we said, we don't expect land sales to be margin enhancing in 2026, so that benefit will unwind. We also had a 0.5 percentage point impact from the GBP 20 million one-off charge relating to historic workmanship issues at the legacy London apartment scheme. So these 2 impacts dropping out will be broadly neutral going into 2026. The headwinds from pricing and build cost inflation were partly offset by improved recovery of operating expenses as both volume and revenue grew.

So turning to cladding and fire safety. This slide will look familiar to everyone from the half year, and I'm pleased to say that the overall provision has remained broadly unchanged. That sits alongside strong operational progress. We've continued to move at pace, progressing assessments, initiating further works, and we've now fully remediated 62 buildings. Since June, the number of buildings awaiting formal assessment has reduced by around half. There is still significant work ahead, but the stability of the provision over the past 6 months reinforces the robustness of the assumptions we updated in June.

To date, we have set aside GBP 544 million for cladding and fire safety remediation and spent GBP 131 million. That leaves a remaining provision of GBP 413 million. Our cost estimates on assessed buildings, including the cavity barrier risks highlighted at the half year have continued to prove robust. The small uplift you see reflects routine mechanics, the unwind of discounting and minor updates to assumptions such as inflation and legal costs.

Cash spent in 2025 was GBP 49 million, around half our previous guidance, mainly due to the delayed invoicing from the Building Safety Fund. With those payments now expected this year, we anticipate around GBP 150 million of cash outflow in 2026 and about GBP 100 million in 2027, with remediation still expected to conclude in 2030.

Our balance sheet remains a core strength of the business. Net operating assets were broadly flat at GBP 3.8 billion. Land -- net of land creditors reduced modestly, reflecting the contraction in the short-term landbank to 77,000 plots, consistent with progress towards the targets we set out in October. Work in progress increased year-on-year, supporting higher outlet numbers and continued infrastructure investment to support new outlet openings. Tangible net asset value per share declined to GBP 1.176, driven by the increase in the building safety provisions in the first half.

Turning to cash flow then. This bridge shows the movement from opening to closing net cash. The working capital outflow reflects higher debtors due to the London bulk deal signed towards the end of the year and lower creditors mainly from reduced affordable advance receipts and customer deposits. The land decrease includes a higher level of deferred receipts on land sales and the increase in WIP supports our outlook growth strategy as planning momentum improves. After tax, interest, dividends and other items, we ended the year with a strong net cash position of GBP 343 million, in line with guidance provided at the half year.

Now I've included this slide to reiterate a couple of points from our investor and analyst event in October as this is a critical focus for the business. Our medium-term plan remains 14,000 U.K. completions, 4.5 to 5 years of short-term landbank, 16% to 18% adjusted operating margin and return on net operating assets above 20%. Capital discipline across land and WIP is central to delivering those improved returns.

In 2025, we made good progress, returning capital into smaller sites, reducing the scale of the landbank, increasing outlet numbers and improving the distribution of our investments across the country. The short-term owned and controlled landbank is now 77,000 plots, down from 79,000. The average approved site size reduced again in 2025 to 211 plots compared to an average of 260 in the previous 5 years. And we closed the year with 219 outlets, up 3%.

As we discussed in October, WIP invested in both London and infrastructure will take time to normalize, but we're seeing early progress. WIP per outlet has improved since the half year and is now back in line with end of 2024 levels. London apartment WIP reduced from GBP 270 million in June to GBP 200 million and the GBP 100 million of land sales completed in 2025 will release around GBP 30 million of infrastructure capital for reinvestment to fuel future growth. So there was good progress in 2025, increasing confidence in our ability to deliver the returns set out in our medium-term plan.

Next, turning to our capital allocation priorities. Today, we're announcing an evolution of our shareholder distribution policy. But before outlining the change, I think it's important to note the context. Taylor Wimpey is inherently highly cash generative through the cycle, and that cash continues to fund the consistent investment we make in land and work in progress to support future growth. That remains unchanged.

As a result, the first 2 priorities of our framework stay exactly as they are, maintaining a strong balance sheet and investing in land and WIP to underpin sustainable long-term growth. We've been equally consistent in returning significant cash to shareholders. Since introducing our ordinary dividend policy in 2018, more than GBP 2.8 billion has been returned. Our existing distribution policy, returning 7.5% of net assets or at least GBP 250 million each year through the cycle also remains in place.

What we're introducing today is an element of flexibility in how that amount is delivered. We will continue to return 7.5% of net assets split equally between the final and interim. However, from here, a minimum of 5% of net assets will be paid as a regular ordinary dividend with the remaining portion returned either via dividend or share buyback to be determined by the Board as most appropriate at the time. This added flexibility strengthens the policy and supports the long-term interests of all shareholders.

Accordingly, today, we are announcing a final 2025 dividend of GBP 0.0295 per share, equivalent to GBP 105 million and a GBP 52 million share buyback, which will commence shortly. Taken together, this brings total shareholder distributions for 2025 to GBP 322 million, including the 2025 interim dividend. Finally, our fourth priority remains unchanged. We will return excess cash to shareholders when appropriate. So with the combination of good cash generation, a strong landbank and an invested WIP position, giving us everything we need to support disciplined profitable growth, it's clear that our long-standing commitment to funding the business first remains fully intact, and this evolution in policy is built on that foundation.

So finally, turning to guidance. As you would expect, we remain mindful of the broader geopolitical backdrop, including recent developments in the Middle East. Our outlook today reflects the conditions we see in our markets at present and does not incorporate any potential impact from those emerging events given the uncertainty and the early stage of development. With our strategic approach to land and strong conversion into outlets, we continue to expect average outlets to be higher in 2026 than in 2025.

Trading in the year-to-date has been encouraging, although we did enter the year with a slightly lower order book. Against that backdrop, we are setting U.K. volume guidance, excluding joint ventures at 10,600 to 11,000 completions for 2026. At our January trading update, we covered the 2 main moving parts impacting adjusted operating margin in 2026, and I'll recap those now together with one further relevant factor for 2026.

Pricing in the opening order book was around 0.5% lower year-on-year, driven by bulk deals. We continue to see low single-digit build cost inflation and legal completions in Spain are expected to normalize this year to around GBP 350 million to GBP 400 million after 2 years of higher than usual output. Taken together, these factors are a headwind to profit margin in 2026 relative to 2025, and we, therefore, expect adjusted operating profit of around GBP 400 million, and we expect pre-exceptional net finance charges to be around GBP 30 million.

As we said in January, U.K. volumes in 2026 are likely to be more second half weighted than usual with around 40% completing in half 1, reflecting the softer market conditions in Q4 last year. Given the half 1, half 2 phasing effect, we anticipate a larger half 1 cash outflow than last year, resulting in around GBP 0 to GBP 50 million of net cash at the half year with the half 2 weighting of completion supporting a recovery in the balance by the year-end.

So in summary, I'm pleased with the group's performance in 2025, a strong and resilient result despite a changeable market backdrop. Looking ahead, our focus is on leveraging our excellent land position to drive outlet growth, which in turn supports volume growth, margin progression and enhanced return to shareholders over time.

I'll hand you back to Jennie.

So taking a step back then and looking at the market as a whole, we are pleased to see some signs of improvement and opportunity. Mortgage availability remains good with mortgage rates lower year-on-year and real wage growth supporting affordability, though still more challenged than in the years before the downturn. Unemployment remains at low levels. And although customer sentiment is lower generally, it has been on an improving trend.

In addition to the budget uncertainty through much of the second half, last year was also impacted by a notable increase in the amount of secondhand stock on the market. And although we hope for improvement this year, we're also ensuring that our customers are aware of the benefits of buying new. Encouragingly, first-time buyer numbers are showing some signs of improvement, but remain well below the levels we saw before the downturn. Deposit building remains a real challenge for this group, particularly in the affordability constrained south.

On the Section 106 affordable housing side of the market, securing partners remains a challenge. But despite that, we are in a good position for 2026 affordable deliveries. Overall, medium- to long-term drivers continue to look positive. And as a result, our medium- to long-term view of the market opportunity is unchanged. There is a long-term structural undersupply of homes in the U.K. However, we also now have a political commitment to address undersupply with meaningful interventions to support supply side bottlenecks such as planning and more on that later.

So turning now to Taylor Wimpey and our focus on controlling what we can and driving value from it. A good example here is the performance that we're driving from our marketing platforms. Last year, we updated you on how we changed our marketing approach to target fewer but higher quality leads, and it's pleasing to see clear benefits of this. We've also improved the online experience for customers through optimizing media and website effectiveness. We are seeing good quality lead generation, a year-on-year increase in overall appointments, which is still the best indicator of future intention to purchase and better conversion rates.

And finally, we are seeing good quality visitors with a strong intention to move, but decisions are taking time with customers visiting sites multiple times before commitment. Spring selling season is progressing well with our performance similar to this time last year, which you will remember as a strong comparator. The year-to-date net private sales rate compares well to this point last year. The last 4 weeks have been a bit stronger at 0.87, including bulks or 0.83, excluding bulks, and that compares to the same period in 2025, which was 0.82 with no bulks. Whilst this is encouraging, I think we should remain mindful of the weak trading in quarter 4 and that it is still early in the year.

As we told you in January, our order book at the start of the year is a bit lower than the comparative period given the tougher trading environment that we saw in the second half of 2025. We had a strong Boxing Day sales campaign supported by proactive management actions, and we can see that the appointments taken in this period are now converting into sales in recent weeks. As a result, the order book has made some progress, and it currently stands at 7,678 homes compared to around 8,000 at the same time last year.

As I said, customer sentiment is moving in the right direction. However, we are still seeing first-time buyers, especially those in the South, grappling with affordability constraints. As a result, incentives remain an important factor in gaining commitment and are running around 6%.

Now over the next few slides, I'll show you the progress that we're making in driving a more efficient land position and liberating our strategic land pipeline through our assertive planning strategy. We're still at the relatively early stages of the new planning cycle. But as expected, we've seen some early improvements in decision-making because of the changes introduced by the NPPF at the very end of 2024.

These pie charts represent a snapshot of expected outcomes for our assertive strategic applications as at February 2025 and February 2026. I think if you want a stat that really shows a shift in sentiment, this is a good one. At this moment in time, we forecast 49% of planning officers will make a positive recommendation on our assertive applications. That's more than double the 22% we saw at the same point last year. I would stress that this is a point-in-time snapshot of what is a dynamic process. So as applications progress through the various stages of planning consideration, such as consultation stage, we would expect the not known categories to crystallize in some numbers towards the positive.

With a clearer and more consistent planning policy backdrop weighted to housing delivery, our proactive strategy is delivering. This clarity means that we are being more determinative in our approach to engagement at a local level. It also means that we are more confident in a positive appeal outcome than in past years, and we are choosing this route more quickly when local engagement routes are exhausted.

And not on the slide, but in terms of overall applications, sentiment has visibly improved with positive planning progress or planning achieved on 71% of applications in 2025 compared to 58% the prior year. So against this positive and improving backdrop, how are we faring? So you will recall that I've been telling you for some time that we've had a very deliberate and targeted strategy since 2023 to get ahead, load the planning basis and now we are seeing results. We achieved detailed planning for over 10,000 plots in 2025, 28% increase year-on-year.

On the chart that you can see on the left, while some of those applications have been in the system since 2023, many more were submitted more recently and have benefited from early progress following the NPPF. We also converted over 5,000 plots from the strategic pipeline in the year, not unexpectedly weighted to the second half and final quarter. Additionally, plots for first principal planning determination are continuing to increase, now standing around 32,000 plots, and we are progressing them through planning at a pleasing rate.

At the investor and analyst update, we set out a number of set of applications that we intended to submit from our strategic land pipeline. Just to stress, these applications are over and above our business as usual planning activity. In October, we expected to submit 52 applications in 2025 compared to 20 in 2024 or around 11,500 plots. I'm pleased to say that our teams have worked hard and hit the application target, surpassing the plot count level. In October, we also talked about 17 set of applications being targeted for committee decisions. And this was a stretching target. And whilst applications came in slightly below, in plot terms, the numbers came in broadly in line. And we have since had a number of those delayed applications go to planning committees in 2026.

So all in all, I think it's a good showing relative to our experience in most recent years. All this is key to driving outlets, and we are maintaining the momentum, which we will see in the next slides. We start from a position of strength, a strong short-term landbank sitting at 77,000 plots, which continues to give us the confidence that we can deliver growth without net investment in land. Our intention in the land market in 2025 was to continue to be selective and below replacement. In the year, we approved around 8,000 plots. And as you heard from Chris already, the average site size of those approvals was around 211 plots, in line with our strategy to target smaller sites. And the geographic distribution approvals nudged in favor of our Northern businesses.

The land market remains uneven, but there are signs of gradual stabilizing as the flows of opportunity improve. Competition remains high for well-located deliverable sites, whilst more complex or lower-value locations see less competition. Investment is, I think, expected to remain selective in the near-term as landowner pricing realism continues to act as a constraint in some areas. We remain confident of delivery over the next few years. We already own and have planning for all of our 2026 completions and already own or control everything we need for 2027, almost all of which has planning. With the momentum we've outlined, we are on track to open more outlets in 2026 than we did in 2025 and expect average outlets to increase year-on-year.

So now I'm going to run through a couple of example sites approved during 2025. Both examples are own sites that we've unlocked and I think reflect the tangible benefit of our assertive planning actions. They demonstrate the improving planning environment and illustrate how our mature strategic land pipeline is supporting early delivery during this period of planning opportunity.

So you may recall that in October, Shaun White highlighted this particular site located in the Green Belt on the edge of Solihull. We have held this land for over 30 years. And I think a few sites demonstrate the maturity and value within our strategic pipeline or indeed the frustrations of the planning system quite as well as this one. The journey hasn't been straightforward though it was considered as a draft allocation in the early 2010s, the site didn't make it into the 2013 adopted Solihull local plan given limited Green Belt review.

Though the site was not formally adopted, it was never dropped, but was identified as a draft allocation since the local plan review commenced in 2015. After various stages of consultation, the local plan journey concluded negatively in October 2024 when an inspector's report into the plan concluded that it would be found unsigned if pursued. So after nearly 10 years of effort, the council withdrew their plan. But the breakthrough came when 2 things aligned, our continuing local engagement and the emergence of the draft NPPF 2024. This caused an immediate shift in sentiment within the council, a council which now find itself under real pressure to deliver a 5-year housing land supply.

In fact, as Shaun noted in October, whilst we had already worked to prepare an application, we were now actively encouraged by the planning authority, and we submitted an application in December 2024. This came against a positive backdrop, an updated NPPF guidance on Green Belt release and strengthened recognition of local housing need. What followed was a marked change in pace, engagement with officers and elected members was constructive throughout, and we secured a resolution to grant within 12 months. That is rapid progress in today's planning environment and a testament to the quality of the work from our team and the appetite of forward-thinking councils to approve high quality schemes on a proactive basis to support their housing need.

We now move to the next phase. Reserve matters applications are underway and will be submitted later this year with an outlet anticipated late 2027. This site, I think, is a story of the commitment and our commitment to strategic land over the long-term, to partnership and being agile enough to act decisively when the environment shifts in our favor. And it represents exactly the kind of capital-efficient progress we need, land we have held for decades, unlock through determination, good timing and the strength of our relationships.

And now a smaller site example, this one at Abbots Langley, another owned site, which was acquired in 1996 on Green Belt land now considered grey belt. We submitted a detailed application in July 2025, proposing 50% affordable housing. What made this possible was the constructive early engagement with the local planning authority. They encouraged a detailed submission in this instance because the housing need was clear and the authority could not demonstrate a 5 year housing land supply. And as a result, the presumption in favor applied, giving the application a strong footing from the outset.

That clarity and national policy meant that our teams could move confidently and present a high quality scheme with the right evidence behind it. The shift in sentiment, combined with the planning reforms created an environment where good applications are now progressed quickly and Abbots Langley is a perfect example. We'll shortly begin work on site with an outlet scheduled to open in the second half of this year.

So to summarize, the assertive planning strategy that we've pursued since 2023 is delivering results. The planning reforms have created a more decisive and supportive environment and where engagement is tougher, if updated, then the NPPF gives our teams the certainty they need to pursue an appeal route if required. The examples this morning give me confidence that the planning landscape is continuing to improve and that it will be supportive of our medium-term targets.

So we outlined these targets to you in October last year, and this is our business focus. We remain both committed and confident in achieving these over the medium-term. During 2026, we will continue to focus on strategy execution and with improvements in results coming through over the medium-term. And as a reminder, this plan is predicated on current market conditions, so sales rates around the levels we've seen over the last 2 years.

So you've heard today that our strategy is in progress and is driving returns on what has been a challenging environment over the last few years. We are a business with a strong balance sheet, excellent landbank and experienced teams, and we've ensured that we are ready and poised for growth. We are well positioned. Our planning strategy shows signs of early wins with continuing momentum in an improving planning backdrop. Day-to-day, we're focused on driving outlets, recycling capital and driving returns without net land investment.

Thank you, and happy now to move to questions.

Jennie, Allison from Bank of America. Just 2 questions from my side. So first, can you give us a bit color in terms of the sales rate in January, February, like how it is progressing? And what's the driver behind that?

And the second is, can you tell us how the incentive has changed maybe year-to-date versus last year?

Okay. So I think in terms of what's driving the sales rate, probably different than we saw at the end of 2024 and start of 2025. we had a fairly subdued market in the final stages of 2025. I talked about sort of our leaning into the Boxing Day campaign. We had generated a lot of interest, but we were coming off a fairly soft start. So the teams need the opportunity to build the leads into sort of further engagement into site visits and then reservations. So it's perhaps not surprising that January was just a little softer given that sort of a slow start coming in from the tail end of 2025. And as I mentioned, we have seen sort of increased momentum in the last 4 weeks. So February, the last 4 week rate was 0.87 and excluding bulk was 0.83 against a comparator of 0.82. So month-on-month improvement there.

And in terms of incentives, we're running at around 6% now. We are seeing that customers have an expectation of a deal. And there is, as I mentioned, quite a lot of inventory on the secondhand market. So there's customer choice. So using that incentive to support customer commitment.

Zaim Beekawa, JPMorgan. The first is on the -- obviously, in light of no demand stimulus, some of your peers have done some shared equity schemes. Has a view changed there in terms of offering something similar?

And then second, on the landbank evolution, Chris, I think you gave sort of the details on the margin bridge, but maybe some details as to how much that could impact completions in '26 also?

Okay. I'll give Chris the landbank evolution question. We continue to look at various models in the market around sort of shared equity and others. We see them as quite expensive, both for the customer and for our balance sheet. And from what we can see in the market, they're not really driving sort of customer engagement. We have a very strong platform to engage with customers and to drive inquiries, which is working well for us at the moment. I would stress that we do continue to look at various models coming to the market, but we need to ensure that it is actually a benefit to the customer and that it also comes at a reasonable price to the developer. Chris?

Yes. And on the landbank evolution, I said back in October that our expectation was that the impact would be minimal in 2026. It would start to kick in, in 2027 with the lion's share in '28 and '29.

Ami Galla from Citi. A few questions from me. The first one was on the market. To an extent on the PRS side or on bulk deals, I remember that the broader backdrop was a lot more difficult in the second half of last year. How has that shifted into early this year? And are you seeing more sort of opportunities there to make bulk deals at a better pricing? If you could give us some color in terms of the sort of discount that you have to give on bulk deals, that will be helpful.

The second question was just on the Section 106 process. The government has talked about a clearance mechanism. Can you give us some sense of how do you think that will pan out? And do you think that would help you as we think about the sort of second half and the order book beyond that? And the last one was just on the timber frame facility. Can you give us an update of how that is progressing? And how should we think about the utilization there?

Okay. Just on the Section 106, Ami, to government clearance. Yes. Okay. We haven't seen any sort of material change in sort of PRS sort of activity or pricing since we entered the year. And we're seeing some fairly deep discounts being sort of presented sort of out in the market. So no shift that we are seeing.

On the Section 106, although government have sort of made some guidance available, the frustration, if I can call it that, is that it is just guidance. It's not a directive, and it lacks a degree of punch that we need with local authorities who are unwilling to engage. We're actually making really good progress with local authorities who are willing to engage, and that's very pleasing. But we do continue to meet some fairly incalcitrant authorities unwilling to discuss potential cascade mechanisms, for example, for Section 106. So we would be still asking government for something that's genuinely a solution to drive that part of the market. But to just reconfirm, we are in a good place for 2026.

And in terms of timber frame, it's progressing well. It's maturing. We're learning as we go, and I'm quite pleased with progress at this point, Ami. But it really will come into its own when volumes start to step up. It's intended to be there to support us through skill shortage and sort of more rapid growth period.

Aynsley Lammin from Investec. I think I've got 3 as well actually, please. Just you flagged up again the kind of affordability constraint around first-time buyers, and there's been some noise again around the potential kind of fiscal stimulus support on the demand side for government. Just interested, I think you're always quite well plugged in. So interested in your view of where we might be there, where government's thinking is on a kind of Help to Buy type scheme.

And second question, just interested a bit more color, I guess, on build material cost inflation, labor inflation, what the trends are doing there? And then thirdly, just on the kind of change of more flexible share capital returns, did you consider at all reducing the quantum? You still obviously seem very wedded to that 7.5%. And what's the criteria you'd use between kind of choosing dividends versus share capital return -- share buyback?

Okay. I mean in terms of affordability, although we're seeing some improvements, we talked about the sort of variable difference between North and South. The wage growth and some improvements into -- sort of from the FCA and PRA changes last year have helped around thresholds, stress testing, income multiples. But in higher value areas where deposit building is still a very significant challenge and maybe add on to that stamp duty as well in some areas where entry homes are above the stamp duty threshold.

So we see that the first-time buyer is still sort of heavily impacted. And I think that, that's playing out right across the market. The scale of the inventory sitting in the second half market. I think that the lack of activity from first-time buyers is part of the cause of that also. So we do think that there is a case, particularly now that we're seeing such progress in supply side, but continuing weakness in demand for some form of demand side stimulus. There have been discussions with government, but it would be too much to say that those are progressive at this point.

And then in terms of sort of capital returns before I pass over to Chris for the build cost and maybe more detail around dividend, I think it's important to note that the overall distribution remains at 7.5% of net asset value. But that flexibility or sort of evolution, we think, is in the best interest of our shareholders at this point in time.

Chris, do you want to pick up on build costs?

Yes, of course. So you saw on the slide today, 1% build cost inflation for completions in 2025. The exit rate that I mentioned, I think, in January was 1.5%. In January, we saw several manufacturers request pretty sizable increases, the order of 5% to 10%, well above inflation. We pushed back and many of those were sort of either withdrawn, deferred or partially offset through rebates, although we haven't been able to eliminate all of those increases. And the pressure is coming from sort of raw materials, energy, packaging and a little bit of labor inflation as well.

So based on where we stand today, obviously, you can see we're guiding to another year of low single-digit build cost inflation, likely higher than the 1% that you saw on the slide. But we'll continue to aim to beat the market through improvement in our procurement practices and other self-help measures, including the benefits from the pull-through of the new house type range, but we would still expect build cost inflation to be above 1% in 2026.

And just to follow-up on what Jennie said on the question on capital returns. We're in a very strong position, Aynsley, to grow output and volumes without needing additional investment across land and WIP as we set out in October. And yes, as you'd expect, the Board does regularly review the overall quantum of distributions in the context of our capital allocation priorities. And you remember what they are. The first one is maintain a strong balance sheet and the second is to invest in land and WIP to support future growth. And yes, if either of those constraints came about in either one of those priorities, then that would prompt to change, but we don't have that at the moment.

Will Jones from Rothschild & Co Redburn. Try 3 as well, please. First, just maybe extending on build costs. Could you just remind us at this stage of the year, what visibility you have in terms of cover for the year ahead? And maybe just expand if you can a little bit on those efficiencies and particularly interested in the house type range and where we are on rollout.

Second was London. Could you give us a sense of either plots remaining completions, just some sense of the proportions there? And maybe if you could help on what the margin drag has been from London in '25 and potentially '26, just high level to think about as and when that reverses back out? And the last, maybe just around land and intake margins, and I appreciate you don't give kind of hard numbers anymore, but any color on as you've got migrated somewhat to the smaller sites into the north, how that's affecting the economics?

Okay.

Yes. So in terms of build cost inflation and cover, yes, I mean, we are well progressed in those -- in that position. So over 90% of our materials are negotiated centrally. We don't -- we've moved away in recent years from having like a point in the year where they all get negotiated, but we have pretty good visibility for this year. So very comfortable with what I've outlined.

I think it's worth just bearing in mind that we've been dealing with build cost inflation and little or no house price inflation for 3 years now, and that's been tough. And it has driven a real sort of step change in how we procure. We've expanded the number of categories and the spend that we manage centrally to maximize our purchasing power. We're retendering those categories more often. We've introduced rapid repricing, which lets us benchmark more quickly and secure better terms as soon as we see sort of signs of pressure from suppliers. And we've recently added e-auctions as one of the things that we're doing and the early results are very encouraging.

And yes, where we have suppliers who are a bit in transient, pushing for unjustified increases, then if we have to, we'll switch supply. So we've made pretty meaningful changes in how we address the market conditions, and we're seeing benefits in that. In terms of the new house type range, it accounted for just over 1/4 of our completions in 2025, and that will rise to just under half in 2026. So obviously, those rollouts just take time to flush them through the landbank. And obviously, planning has been difficult. So now it's a little bit better than obviously, the pace improves.

In terms of, pardon me, London completions and margin drag and all that sort of stuff, actually, it's -- I don't think you should necessarily think about it like that. It is all tied up in the landbank evolution that we've talked about. But actually, some of the London sites that they were procured a long time ago, and they've been delivered very well. So it's not quite right to just assume that they have a massive drag. Some of them are actually pretty good in terms of the margin performance.

And the last one was...

Yes, the landbank or the land intake, I'll take that I'll give you a rest there, Chris. I mean, look, we don't give sort of guidance or -- but I'm really comfortable the acquisitions that we made last year, good markets, good sort of intake margins, entirely supportive of our medium-term targets.

Glynis Johnson, Jefferies.

Yes, Glynis.

Nice to steal the microphone for someone else. Four questions, but hopefully, super quick. You talked about North-South in terms of approvals, a bit of a skew. Can you talk about the outlet openings? Do the outlet openings also have a North-South SKU? And does that make a difference?

Second of all, in terms of incentives, one of your peers yesterday talked about stepping up incentives and stepping up quite substantially and was of the view that others would have to follow. Have you seen incentives move up as we've gone through February? Are you seeing any areas where incentives have stepped up markedly or competition as a whole step up?

Thirdly, London, when do you need to take the decision about whether or not to do further bulk sales in London? What is the -- what are you looking for in London to say, okay, we can just sell out on a normal basis or need to do bulk deals, which you've already said PRS is at quite substantial discounts. Actually, I'll leave it there at 3.

Yes. In terms of sort of outlet openings, we're a business that looks to support all our businesses. And I think that we've got a reasonably good spread sort of across our divisions of outlet openings. On incentives, I mean, I mentioned that incentives are running at 6%. I think that we're working hard on pricing, Glynis. It remains disciplined, and we're certainly aligned to the wider market rather than trading aggressively sort of for volumes.

So we're working, as we always do, to balance price and sales rates without sort of sacrificing sort of value or sort of long-term value. We can see some movements. It's part of the every day. There's a lot going on in the markets. And so our businesses are mindful of sort of changes in behavior by others. But we'll continue to drive that really disciplined sort of balance and ensure that we're doing the right thing in terms of long-term value.

And then in London, the decisions around sort of bulk deals, they're carefully balanced. They're relative to how we're seeing the sales market evolve. We're also mindful of the capital that's potentially locked up and where we think that, that capital is better recycled through a potential bulk deal. As you saw last year, we will make those decisions. But we remain very active in the private sales market also. So there's no plan as such, we will continue to watch the market, and we'll make judgments as we progress. But overall, our approach to bulks hasn't changed. Our preference is to do those on a planned basis.

Alastair Stewart from Progressive. A couple of broad-ish questions. First, on the market. You mentioned it's taking time to secure sales. Have you got any broad comparatives either in the overall length of time from first clicking on to the website and then finishing? Or is it a case of coming back and forward more often than in the past? And related to that, you said there's quite a lot of inventory in the secondhand market. Is a lot of that buy-to-let landlords trying to get out? So that's kind of the first question.

Second question is on the Iran situation. Obviously, a week is not a long time. But are you getting any feedback from your sales outlets that the rank and file buyers are getting a bit jittery. And possibly on the other side, is this great exodus to Dubai tax [indiscernible]. Some of them actually thinking of getting back in a hurry and that in turn may actually support your London market.

And finally, again, costs, any brick manufacturers or anybody else giving you gentle calls saying we've been noticing the price of gas recently, guild your lines for further increases.

Okay. Quite a few things there.

Two questions.

Yes, yes. I think there's 4, but we'll go. In terms of taking time, I mean, I think the overall time taken about 80 days from inquiry to reservation.

Sorry, what was that?

80, 8-0. And actually, that hasn't moved massively. The interesting point in the comments that I made was the multiple visits. So we're seeing customers coming back sort of more frequently than previously. And our teams are working hard with our customer group.

In terms of the secondhand market, it's a good question. And we did do some work as we saw the secondhand inventory climbing sort of last year. It's not as simple as that. Yes, there's a couple of markets where you would say maybe buy-to-let landlords. But it's pretty pervasive, Alastair, right across the country. And I would take it back to you, you need first-time buyers to drive the whole ecosystem, and that's where I would put the issue. We're not hearing anything from customers as yet. And we haven't had any calls from any of the suppliers. And if they're listening, I don't want any are on gas. And a lot of them are hedged in the near-term in any event.

And as Chris says, then we will make sure that we're sort of pushing back very hard on that. And whether there's opportunity sort of in this crisis, I'm going to say there's a human cost to what's going on in the Middle East, then I'm sure that our London teams will be sort of ready and able to talk to them.

Rebecca Parker from Goldman Sachs. Just wondering in terms of your outlets that you plan to open in 2026, how many of those have detailed planning consent? And then secondly, how are you seeing land market opportunities? At the moment I know that you were saying that some landowners, the pricing realism is acting as a bit of a constraint. And then thirdly, how should we be thinking about WIP as we go into 2026, just given that you do have that target to increase outlets?

Okay. Sorry, could you repeat the second question?

How are you seeing land market opportunities just given that you commented that there was a bit of pricing realism acting as a constraint?

Okay. I mean I think as I said in my narrative, we're in an excellent position for 2026 in terms of planning and in fact, in an exceptionally good position for 2027 as well. We are seeing, as I said, some stabilization in the land market. We are seeing more opportunities coming through in many of the geographies. Competition is stronger for sites that are sort of further along the planning process and in good quality locations, weaker where it's more complex, where planning is less evolved. But we talked about in an environment with build cost inflation and particularly with some of the regulatory costs that we're going to see sort of realizing over the coming year, ensuring that landowners are realistic is an important part in the market. And some of the other commentators, Savills and the RICS are seeing very similar sort of positions.

And then WIP, Chris, can you take the WIP question?

Yes. So WIP at the end of 2025 was GBP 2.07 billion. And I think as we progress to the first half, it'd probably be somewhere between GBP 2.1 billion, GBP 2.2 billion at that point.

Chris?

Chris Millington at Deutsche. First one, I just wanted to ask about the medium-term targets. Obviously, the market has been a bit stop starting over the last couple of years. And recalling back to the CMD, it looked like the profile was to get you to those 14,000 completions by about 2029 based on the CAGR growth rate. Where do you think that is at the moment? Obviously, this year, we're looking at kind of 2% growth at the midrange. That's number one, just the timing about mid-terms.

Second one is you've had a few questions around London, et cetera, et cetera. But could you just talk in a general sense kind of how North Midlands versus South has progressed over the last couple of years? And does it move up? And is there much of a margin difference between the 2, given the relative demand profiles rather than just picking out discrete parts of the market?

And the final one is H1, H2 margins this year with volumes back-end loaded with the order book coming in a bit lower. Can you give us some feel kind of how that H1 margin can look? Obviously, we can do the sums over the full year and back out H2?

Okay. If you will take the last one, Chris. I mean in terms of the medium-term, I think we were really clear when we spoke in October about 2026, not likely to sort of demonstrate sort of full growth, and we talked about the achievement of our medium-term targets not being linear. And we also said somewhere between 3 and 5 years. So I think that we remain confident. I've talked a few times in the narrative about remaining confident in the medium-term targets over that time frame.

In terms of London differential, I think it's probably the same answer that Chris gave really. There are differentials. There's always been sort of differentials between our Northern operating businesses and in London. And it would be wrong to characterize all schemes in and around London as per schemes. There's definitely some challenge around sales in those sites, but some of them are performing fairly well on a relative basis.

And then half 1, half 2 margins, Chris?

Yes. Yes, of course. So our half 1 operating margin in 2026 is going to be lower than half 1 operating margin was in 2025, which I think was 9.7% and that reflects 3 sort of key factors. We came into this year with underlying pricing in the order book around 0.5% lower year-on-year. Second, we've seen low single-digit build cost inflation in that 12-month period, we talked about that this morning. And third, obviously, we've signaled very clearly in the statement that the volumes are going to be weighted 40% in the first half, 60% in the second half. And that was due obviously to the softer market conditions that we experienced in Q4. And I think that means we expect to deliver around 30% of the group's 2026 adjusted operating profit in the first half.

And can I come back really quickly? Not on the margin on the geographic split, proportional on completions. However you do split your geography, how much would you regard as North and Midlands versus below that or South of that?

Sorry, Chris.

I'm talking about the proportion of...

Yes. So [ between the ] segment, Chris as you know, I mean, it would be reasonable to expect everything sort of from Nottingham, Birmingham North is North and everything South is South. But we've talked about it's also gradations of. So it gets softer the further South you come. It's not simply just characterizing all of the South as impacted. There are some markets that are more challenged in the South. There are some markets in the North, which are more challenged. So I'm not happy to sort of strike a line and say that's North and this is South because it's a movable depending on markets.

It's just -- it keeps getting referred to as being soft. And it's just to put context around that comment.

Yes. Well, you just think of it on the basis of the further South you come, there's a gradual softening or look at it in terms of sort of pricing. Pricing is, as you come South as it increases, then it becomes more challenging. There are some markets in Kent where affordability is easier. They're doing really well. So I think it's just a way of sort of helping you understand the broad variables.

Okay. One more.

Kate Middleton, Panmure Liberum. Just a quick question on pricing. So I know you're speaking about stronger growth in sales prices in the Northern regions. But just wondering if you can attribute a particular ASP to the North versus London and the South. And then just a couple on sites. So guiding to net outlet growth. And obviously, you've said 211 plots per site is the average for the year. Wondering if that's just what you're continuing to target moving forward or whether that's due to reduce?

And also with the outlet growth, are we looking at sites closing as well as opening at a greater rate? Or is the rate of site closure kind of staying relatively consistent moving forward?

Okay. So we don't segment on an ASP basis, albeit we do give Spain on a separate basis. In terms of sort of average site size, so the 211 that we referred to was on land intake rather than outlet opening. We talked about targeting smaller sites. I think we were really clear in October, that's not small. It's sites that we can still achieve a volume housebuilder sort of benefit in.

So 211 is pretty good. I'm comfortable with that. If it was a little bit lower, that would be good, a little bit higher, fine. And then in terms of outlet growth, well, the rate of closure is a function of the market. And so we'll see how the market sort of evolves over time in the coming months.

All right. Well, thank you very much for your time today. I do know it's a busy -- it's been a busy results day. And Chris and I look forward to seeing you later in the year.

Hello, everyone, and thank you for joining the Taylor Wimpey Trading Update. My name is Gabrielle, and I will be coordinating your call today. [Operator Instructions]

I will now hand over to your host, Jennie Daly. Please go ahead.

Thank you, Gabrielle. Well, good morning, everyone, and happy New Year to you. As usual, I'm here with Chris. I know that you will have seen today's statement, but I'll say just a few words before handing over for your questions. So there's no doubt that 2025 was another challenging year for the industry. However, despite this, we delivered a robust performance. We are delivering on our strategy and remain confident about how the business is positioned for the medium term, but I'll come back to this later.

So first, 2025 performance. We've spoken to you before about how the delayed budget impacted customer sentiment in the second half of the year. So I won't labor this. But given the customer uncertainty that's caused, I am very pleased with our robust closeout of the year. Our U.K. net private reservation rate for 2025 was 0.75 homes per outlet per week compared to 0.75 in 2024, with a cancellation rate for the full year of 15%, the same as the prior year. Excluding the impact of bulk sales, the net private sales rate was 0.65, very consistent with the 0.67 we delivered for 2024.

Total group completions, including joint ventures, were 11,229 and U.K. home completions, excluding joint ventures, were 10,614, so in the middle of our guidance range. U.K. overall average selling price was GBP 335,000, marginally lower than our GBP 340,000 guidance due to mix, including a slightly higher weighting of affordable completions. The softness in the second half inevitably impacted order book, and we ended the year with an order book valued at circa GBP 1.9 billion, a little lower than the circa GBP 2 billion closing order book this time last year.

Given the more subdued autumn customer backdrop, we carried 6,832 homes into 2026. That's 480 units down year-on-year. And as a result, we expect to be more second half weighted this year. Importantly, though, I am pleased to say we continue to make encouraging progress on outlet openings. We traded from an average of 208 outlets in 2025 and ended the year with a total of 219 outlets. So pulling all of this together for you, group revenue for the year increased to circa GBP 3.8 billion, driven by higher volumes, average selling prices and land sales. As a result, we expect to deliver 2025 group operating profit of circa GBP 420 million and an operating profit margin of around 11% in 2025, which includes 60 bps benefits for land sales, which I will come back to just shortly.

Turning now to land and planning. We've seen positive planning progress through the year, and this, in turn, has led to stronger land sales, which we typically do once we get planning or put infrastructure in place. This is consistent with our strategy. And as we set out in October, we will deploy this cash into smaller sites, which will help to give greater breadth of outlets over time and increase group returns. Reflective of our attractive land holdings, the land sold was at a good profit, contributing 60 bps to our margin as we disclosed in the statement. So it is worth noting for your models that we don't expect this to reoccur in 2026 to anything like the same level.

I think it's also worth spending just a few moments on the very good progress we have seen in planning in 2025 because it's a key part in progressing towards the medium-term targets we outlined in October, and we remain confident in those targets. As expected, we saw a noticeable pickup in decisions in the last quarter. Firstly, we saw a number of planning approvals effectively clearing along the way the determinations by local authorities where we had previously seen little momentum, but where councils are now feeling pressure to target a 5-year housing land supply.

A good example of this would be our scheme in [indiscernible] for 311 plots where the application was 4 years old on an allocated site. Secondly, in the final quarter, we also saw a number of important determinations of applications submitted as part of our assertive planning strategy, which has been operating since 2023, including own sites in Solihull and Berkhamsted, both around 650 plots each.

And thirdly, we saw the speedier determination of a number of applications for smaller sites submitted specifically in response to the December 2024 NPPF. And 2 great examples of this are our applications at Merchant, which was for 103 plots and Abbots Langley for 192 plots, which demonstrates just how quickly some local authorities are now moving. Both these proposals were submitted following the NPPF, achieved planning committee approval in 10 months and 5 months, respectively, noting like the Abbots Langley proposal was, in fact, a detailed scheme. So really pleased here, but much more for us to go at.

Turning to current trading and 2026. I know you'll be interested in how the year has started. The usual caveat applies. We're only in the second real week trading. So it's very early in the new year. But as you would have expected, we've released a Boxing Day campaign and are staying very close to customer response. The interest rate cut in December continues the trajectory of rate cuts, which while largely factored into mortgage rates are nevertheless helpful for overall customer sentiment. Inquiries are at similar levels to last year, and our focus has been turning that initial interest into appointments on site.

As usual, we'll give you full guidance for 2026 alongside our full year results when we have seen how the spring selling season has started. However, we've given you some additional color in the statement this morning, which is hopefully helpful when you think about the moving parts for 2026. At present, we are continuing to experience low single-digit build cost inflation. Overall, private underlying sales prices remain resilient. However, pricing of bulk deals contracted in the second half of the year was softer. And so overall pricing in the order book is around 0.5% lower year-on-year.

This reflects certain site-specific transactions in London where given challenging market conditions, we have chosen to transact to reduce sales exposure and recycle capital in line with our plans. Together, these will have an adverse impact on 2026 group operating profit margin, and we've been explicit today that we expect this to be lower in 2026 than in 2025. We remain focused on positioning the business for growth as the market recovers. As I've outlined, the positive impact of planning reform is noticeable in recent decisions and with an improving planning pipeline, our teams remain focused on aligned to drive value for our shareholders, including tangible progress in outlet openings to best position us for delivery and growth, and we still expect average 2026 outlets to increase year-on-year.

Market improvement may be taking longer than anyone would have liked, but there remains significant opportunity to deliver much needed homes. We have aligned the business, both strategically and operationally to benefit from the improving planning environment even in a more subdued market through outlet-led growth and remain confident this will be demonstrated over the medium term.

So thank you, and I'll now hand over for your questions.

[Operator Instructions]

Our first question is from Will Jones from Rothschild & Co Redburn.

I'll try 3, if I can, please. The first, maybe just on your various lead indicators you track any color? And I think you talked about inquiries being similar year-on-year. Just wondered if that marked any change versus how the second half last year was looking on inquiries compared to prior year.

Second was just around pricing and just generally what you think it will take for the group to be able to post, say, a 1% to 2% price increase at some point? Is there a certain sales rate we should have in mind or maybe affordability is getting to a position where you can start to think about that? And then lastly, around outlets, obviously, a move up into year-end. Do you think that 219 can kind of hold in the near term? I'd appreciate you're saying the average will be higher year-over-year, but just wondering on that spot figure, perhaps just high-level thoughts for the first half.

Okay. Will, thank you. In terms of lead indicators, yes, I think our inquiry levels were fairly consistent with what we had seen in the similar period in 2024. I mean that does mark a fairly strong increase on where sort of we were ending the trading part of December. So pleased with that. You'll know that we put some sort of work in last year. We talked about driving better quality inquiries. And I think that we're satisfied that we are seeing better quality inquiries coming through. I mean just to put a little bit more color around it for you, perhaps not surprisingly, organic traffic was lower. So it was very much driven by sort of paid media and sort of active sort of campaign intervention, but total traffic was pleasing, and we're seeing a strong sort of conversion into appointments sort of following that.

So as I say, inquiries consistent really be how those inquiries start converting over the next few weeks. Around pricing, I mean, probably not surprising, we're continuing to see that differential between North and South. The North has been sort of robust. We've seen some gains, but the south has been very challenging. And you'll have noted that comment that I made about sort of London in particular and the choices that we've made there. I am pleased that we are seeing gradually improving affordability. And we're seeing that interest rate play through and sort of wage growth playing through. But my comment in the top of the statement around first-time buyers is very much sort of that deposit, still struggling with deposit, that transactional cost.

The cost of servicing the mortgage, I think, is a case well made. And as always, we look at our plot releases sort of each week. And if there's an opportunity to drive price, then we'll be taking it. And on outlets, yes, look, we closed the year at 219. You know that in October, November, we were guiding sort of in the range of 210, 215. So a bit of benefit from the slower sales, but generally moving in the right direction. And I'm confident that we will grow average outlets year-on-year.

Our next question is from Aynsley Lammin from Investec.

I think I've got 3 as well, actually. Just following up a bit on Will's comment around site numbers. I mean, just thinking about completions this year, if we assume a stable market, obviously, your order book is lower, you're kind of flagging up maybe some weaker trends in demand in the bulk sales. Would you still expect completions to be higher in a stable market in FY '26, given your kind of expectation around higher average sites?

Second question, just on margins. And just to clarify the comment that margins are expected to be lower for FY '26. Is that even once you take out the impact of the 60 basis points of the land benefit, so lower again on that? And then third question, just on the interest cost. I think that was slightly higher than I had in at GBP 30 million for this year. Would you expect that to be similar in FY '26 at this point? Obviously, lots of moving parts there. But just -- and generally, maybe a bit of color around the interest cost, which was higher.

Okay. Thanks, Aynsley. I'll take the first, and Chris will pick up on the margin and interest costs. I mean, as you know, look, we won't give volume guidance until the prelims and once we see the spring selling season sort of mature a little bit. We're starting with a slightly lower order book on a private unit basis. But as I mentioned there, we do expect average outlets to grow year-on-year. So taking your starting point, if we assume a stable market in that 0.75 that we've seen '25 and '24, then I'd still expect there to be maybe sort of low single-digit year-on-year growth. Chris?

Yes. And on the margin, we've tried Aynsley, to be helpful in this statement by providing visibility on the outturn and components of the 2025 operating margin together with the factors impacting the margin trajectory into 2026. And yes, you can see clearly that we expect group operating margin to be around 11% in 2025. That figure includes the one-off GBP 20 million half 1 charge as well as the margin-enhancing land sales in half 2. And those 2 impacts broadly offset each other. So the underlying margin for 2025 is essentially the same, 11%, and that forms the starting point for thinking about 2026.

Owner-occupied pricing on private homes has remained resilient. However, as Jennie just touched on, softer pricing on bulk deals secured late in the year means the net underlying pricing in the closing order book is about 0.5% lower than a year ago, and we continue to see low levels of build cost inflation. And taking these house price and build cost dynamics together, which are both slightly unfavorable, we expect group operating margin to be lower in 2026 than in 2025. And as usual, we'll provide further guidance on both pricing and build costs at the prelims when we have had the opportunity to assess trading at the start of the spring selling season.

And in terms of net finance costs, yes, they were a bit higher in 2025 than we expected at GBP 30 million. And you'll recall, we guided to GBP 25 million. And that was just due to a number of small movements, including lower bank interest receivable as cash from completions came in a bit later than we anticipated and higher level of imputed interest on land creditors. We'll obviously give you guidance in March for 2026. But overall, I'm not expecting them to change much year-on-year.

Our next question is from Ami Galla from Citigroup.

A few questions from me. The first one was on build cost inflation. If you could give us some color as to what are the moving parts? And a degree of -- can we have -- can you really push back on the build cost inflation coming from the supply chain given the market that we're working with? The second question was on outlet openings. I appreciate the color that you've given in terms of outlet growth into next year. Given that we've got local elections in May, to what visibility do you have on your outlet opening plans and with the assumption that we could see some stalling in the market in the very short term this year?

And the last question I have was on Section 106 take-up. Has there been any change post budget on the regulatory side that could make life easier in that end of the market?

So I'll take the last 2, Chris, if you want to sort of do build cost. I mean, working backwards, Ami. Section 106 take-up, not much change. No specific sort of help coming out of the budget. The rent convergence that I know others have talked about would help give sort of greater visibility and capacity and balance sheets for housing associations and therefore, could see some improvement. But it's still quite sticky. And the teams are working hard with some of our very established sort of partners there.

On outlet openings, we do have good visibility, and we're in a very strong position from a sort of planning perspective. And whilst there's always concern around local elections and disruption that, that might have on decision-making, I'm less concerned about it for our 2026 outlets. Potentially, it could have some sort of future knock-on, but not a meaningful risk for us for 2026. And then build costs, Chris?

Yes. So in line with our guidance there was low single-digit build cost inflation in 2025. The spot annualized build cost inflation as we exited 2025 was about 1.5% which obviously incorporated the increase in pressure from ground workers that I referenced at the half year. Supply chain negotiations for supply of materials in 2026 are ongoing. So it's just too early to guide for 2026. But we have seen a number of material manufacturers ask for significant cost increases well above inflation. And given where the sector volumes are at present, we are pushing back strongly on those requests for price increases. And we're able to do that by having a diversified supply chain.

We managed the pressure on the labor side very effectively in 2025, which will no doubt increase the pressure as we progress through 2026. But obviously, as Jennie has touched on, we have plans to open plenty of new outlets and the negotiations that, that then drives will help us mitigate that pressure.

Our next question is from Chris Millington from Deutsche Bank.

A few, if I could, please. The first one, I just wanted to understand is kind of the strategy behind pushing those bulk sales out at the end of 2025. We've seen obviously, one of your peers kind of let the sales rate fall away at the back end of the year. And I understand that has order book connotations, but it does feel like if you're having to give quite a lot of price away there. So really just curious about where your attitude is on volume cash versus price and margin. So I'll do one at a time actually rather than just witter on.

Okay. I'll take that. I mean, look, I think that I'll start off by saying the volume of bulks that we did in 2025 was very similar to 2024. So there's no real change in terms of sort of quantum or overall outlook. And I've very specifically referred to sort of the London market. So these are multifamily apartment schemes. I'd say they're well designed. They're well built, but we are seeing quite sort of meaningful challenge to trading conditions in London. And we've got a sort of good level of visibility on build costs. We're very advanced on procurement. And so this is a challenging sort of business decision that's taken on balance disappointing in the short term. But ultimately, I think it's in the interest -- best interest of the business in the medium term. So very much focused on the specifics in this particular instance, Chris.

Okay. That makes sense. And look, if we had a situation at the back end of 2026 where sales rates were lagging against that kind of expectation of flat sales rate, do you think you'll be doing something similar? Or do you think you would take your foot off the pedal on volume and support margins? Just curious about kind of how that progresses through this year now you've sold those multifamily units.

Well, look, we've sold those multifamily units. The schemes still have a bit to run. But look, it's always a matter of do we see -- what do we see in the outlook? What are all the other variables that are going on at the time. As I say, it's a balanced decision. I'm disappointed because I think they are good schemes. But overall, recovering our WIP and investing for shareholder benefit in the medium term on the balance in that instance.

Got you. Next one, I just wanted to ask really, it's a bit of a reminder, and perhaps this is for Chris, but you're down 0.5% in the order book at the start of '26. By memory, I think you had a similar thing at the start of '25. So should we think pricing in the order book is roughly about a percentage lower than it was coming into 2024? Am I thinking about that right, Chris?

Yes, that's correct.

Good. Okay. And then look, that was an easy one. Final one. It's just -- we talk a lot about build cost inflation here and your guidance has been really helpful there. What about your employee costs, both in the cost of goods sold and administration costs? What pressures are you seeing there? How much could those costs move up in 2026?

Yes. So I mean, if you look at admin expenses, then in 2024, they were over 7% of revenue. And in 2025, we brought that down to just under 6.5%. And that improvement reflects the higher completion volumes, the increased average selling prices and disciplined cost control to offset inflationary pressures. And as we look ahead to 2026, yes, it will be challenging, I think, to drive further efficiency gains because volume growth is likely to be lower than in 2025, given the weaker opening order book, and we expect continued inflationary pressure on overheads, much of which relate to salary costs.

We're always going to be very tight on cost, but we also need to balance and be conscious of our ambitions for the medium term and the targets that we set out in October for the business to grow U.K. legal completions to 14,000, margin to 16% to 18% and [ renewal ] of greater than 20%. So in the medium term, that means we're targeting admin expenses probably somewhere in the range of 5% to 6% of revenue, but we're not likely to see that much progress on that in 2026.

Our next question is from Allison Sun from the Bank of America.

I have 2 questions, if I may. So first one is on the volume growth because I think right now, we are seeing the order book is still going down. So how should we think about the trajectory of, let's say, the low single-digit volume growth you are thinking? Is that going to be pretty much rely on the second half recovery? And I would guess it's going to be maybe some improvement in sales rate and also the outlet growth. Is that how we should think about it?

The second question is on the pricing. So because we know in last year, you have some London projects, which probably affect the average price a little bit. So into 2026, should we be concerned about it? Or should we still expect maybe the pricing can still go up?

Okay. Allison, Chris is going to take both of those for you.

Yes. So obviously, on the volume, we'll obviously provide guidance on volumes of the prelims. But as you've seen from the statement, we're starting 2026 as you identified with a lower order book in unit terms. And of that 480 unit reduction, just over 300 relates to private units with the balance in affordable, which, as you know, is much further forward sold. So effectively, yes, we start the year with a private shortfall of around 300 units. At the same time, as Jennie just touched on, we've indicated that we expect to increase average outlets year-on-year. And if sales rates hold broadly stable at, let's say, the 0.75, so consistent with what we've delivered in both 2024 and 2025, then the growth in outlets should more than offset the opening shortfall in the order book. And in that scenario, yes, I guess we'd still expect to deliver low single-digit year-on-year volume growth. But that said, the spring selling season will be key, and we'll update you in the usual way at the beginning of March.

In terms of average selling prices, you can see in the statement, 2 things. I suppose you can see that last year, we achieved a blended average selling price in the U.K. of GBP 335,000. And if you looked in the order book and did the math on that, you'd see that the nominal average selling price is flat year-on-year. I think what you're more likely to see is that mix will provide a benefit of around about 2% from that GBP 335,000 in '25 into 2026.

Our next question is from Zaim Beekawa from JPMorgan.

A few on my side. The first would just be on the Planning and Infra bill. Just any expectations on if you think this is going to be a major change into '26. And then second on the bulk sales price contracting. Would you be able to provide maybe a magnitude? And are you expecting a better environment in '26? And then finally, on the landfill tax increase, just the impact on your business in '26 and how you aim to mitigate some of the increasing costs there would be helpful.

Okay. On the planning and infrastructure bill, I mean, there are a number of elements of the planning and infrastructure bill, some of which will require regulation and statute to be put in place. But I know that speaking to MHCLG and the Housing Minister that they're keen to get those things moving. In terms of pace of determination, the national sort of plan or scheme of delegation, I think, is one because even if it doesn't touch on our schemes, say, it's focused on small house builders. That still removes quite a lot of friction and resource time from a planning determination and sort of resource and productivity perspective. But the issues around the national scheme of delegation and others, I see that the planning and infrastructure bill could meaningfully move sort of the pace of determination, particularly around conditions and other and other things.

On bulk sales, I'm not going to give you sort of visibility into the sort of commercial sensitivities. Look, the number of players in the bulk market is very broad. And there are differences between those that operate in the multifamily type scheme and those that operate in single family. So structurally, they can be quite different. And overall, their sort of objectives from investment can be very different. So it would be wrong to think of them all as moving at the same pace. Nevertheless, as with all businesses, they are sensitive to interest rate movements, gilts and the bonds market. We tend to look at them, as we've said, consistently on a project-by-project basis, and we'll continue to do that.

On the landfill sort of issue, I think that with the change that came through the budget, the increase in the rate for the lower rate of an active waste was disappointing. But what was more encouraging was that exemptions that we had understood would be removed as part of the consultation have actually been retained. And so the majority of the material that we dispose of, it goes to things like quarry filling operations and land restoration. And those would still fall within key exemptions for landfill.

There are impacts. So things like potentially live material, so whether there's vegetation or other things. So there will be impact, but it's maybe a little less than we had understood from the consultation. Our teams already work very hard to limit the amount of material that goes to landfill, but we will be sort of working really hard to minimize those costs wherever possible. But because they're quite specific on a site-by-site basis, it's very hard to give you a value to that.

Our next question is from Rebecca Parker from Goldman Sachs.

Just 2. Just wondering how we should be thinking about the net cash position as we move into 2026 and any moving parts there? And then second question, I know it's a small part of your business, but if you could just give some color on how you're expecting the Spanish business to perform in terms of volumes and prices as we move into 2026.

So I'll do Spain. Chris, you will pick up on sort of the net cash. Spain has performed really well over the last few years. It's fair to say that their volumes have been higher than their normal run rate. And so we would expect Spain to sort of normalize in terms of its output, so more in the 400 sort of unit level. The market remains strong in Spain and sort of pricing remains quite stable. So really pleased with the operations there. On net cash?

Yes. And on cash, obviously, net cash at the end of 2025 was GBP 343 million, so pretty close to our guidance of GBP 350 million. Net cash at half year will be lower because it's always lower at the half year, mainly due to the second half weighting of completions. Last year, net cash reduced in half 1 by GBP 240 million. So that's from the end of '24 to June '25. This year, I'd expect net cash to fall by a little bit more than that because completions are going to be more weighted towards second half due to the lower opening order book and because we'll pay out more in half 1 this year on cladding. And obviously, I'll give you more color on that when we get into March.

Our next question is from Sam Cullen from Peel Hunt.

Just a couple from me, please. Just coming back to the London apartment schemes issue. Can you give us a sense of -- I think, Jennie, you mentioned there are a few more of those to go. What's the scale of those types of schemes in the land bank as it stands currently? Are there more things that we should expect to come down the track in '27, '28 and '29? And then the second one is just your view on what a normalized sales rate is for Taylor Wimpey in the wider industry.

Okay. I mean on London schemes, I think as I mentioned in the sort of October Investor Day, our pipeline in London is effectively winding up. So it's a diminishing part of our business and a diminishing part of our land bank, Sam. So what I'm not ruling out is that there's more completions to go, but we're really in the wind down. And normalized sales rate, now there's a question. It depends where we think the market overall is going to stabilize. I mean I'm pleased given all of the headwinds that we experienced in 2025, really pleased with our sales rate. You've heard us talking about what sort of reasonable assumptions might be for 2026 at the 0.75. Our business can support a higher sales rate. We can build to it. We've got really good execution, but we need to see that affordability, particularly first-time buyers, and we need to see customer sentiment really settling in order to take the benefit of some of that improving sort of affordability and improving interest rates.

Our next question is from Harry Goad from Berenberg.

I've got 2, please. Just the first one around customer affordability. Obviously, debate goes on about whether the government may relaunch Help to Buy. But in the absence of that, would you think about doing anything yourself with regard to shared equity or any other sort of innovative scheme? Have you thought through maybe some of the mechanics of how you could do that?

And then the second point is around land. And obviously, you're talking about more progress on the planning front. Does that mean maybe not right now, but over the next year or 2, it becomes more of a buyer's market as more land -- more consented land comes available?

Okay. I mean I think in terms of sort of customer affordability and looking at sort of potential sort of shared equity and sort of other interventions. I mean we've been very active in reviewing a range of product on the market, but they tend to come both an expense to our balance sheet and more expensive to the customer, and that's not a good outcome for either party, but we'll continue to review those. But what we want to be able to offer for to smooth the dial is something that's genuinely sort of a positive. The focus for me around sort of the first-time buyer as rates ease is really that deposit building and the fact that particularly in the South, but in higher value areas, stamp duty and the change that was made last April has become a headwind for first-time buyers.

And we can see that in instances, although our cancellation rate was very stable, the cancellations due to sort of chains breaking down generally can be tracked back to the first-time buyer. And in order to get the market moving, that's got to be a focus.

On land, I mean, you're absolutely right, Harry, planning sort of relaxation and improved planning outcomes and pace flow through into land market. And if that starts to sort of move more quickly and there's more opportunity available, then that has benefits for pricing. I mean, through last year, we saw, as we did see the land market improving, particularly towards the end of the year. Some of that was to do with new products coming to site. Some of it was to do with the absence of other participants in the market. So a bit of a sort of 2 elements playing through there.

There's also in some specific areas, some noticeable removal of sort of regulatory constraints. So South TAMs, for example, that's been suffering from water neutrality as the solution for that came through in the second half of the year, we saw the land market sort of getting quite busy and good value in that area. What we have seen is vendors becoming a bit more realistic on payment terms, which is really welcome. So we have seen some improvements, room for more improvement, and you'd like to see some areas that have still got a level of constraints seeing some benefits from the planning changes.

We currently have no further questions. So I will hand back to Jennie for closing remarks.

Okay. Well, look, thank you for your time and questions this morning. I appreciate that it's been a really busy week. We look forward within the business to the spring selling season. And Chris and I look forward to seeing you again at the prelims in March. Thank you very much for your time.

Thank you. This concludes today's Taylor Wimpey trading update. Thank you for joining. You may now disconnect your lines.

Good morning, everyone, and welcome to today's Taylor Wimpey Trading Update Call. My name is Seth, and I'll be the operator for your call today. [Operator Instructions]

I will now hand the floor to Jennie Daly, Chief Executive, to begin the call. Please go ahead.

Many thanks. So good morning, all, and thanks for joining Chris and I this morning. I know you have all seen the statements. So as usual, I'll just take a few minutes to run through the key areas before opening up for your questions.

So the high-level story is that we are executing well on the priorities we set out in October, including a focus on efficiency, driving planning progress forwards and opening outlets. In terms of the market, given the uncertainty for customers as they await the budget and also the trajectory of further interest rate cuts from the Bank of England, sentiment continues to be cautious and affordability remains stretched for many, particularly first-time buyers. As a result, there's a lack of urgency with customers as they wait and see the outcome, and gaining customer commitment is a key focus for our sales teams.

As we've previously stated, incentives remain an important part in this. And while underlying pricing is broadly flat, pricing in the southern parts of the country is more challenged. This, together with the low single-digit build cost inflation we have previously flagged is creating a headwind. All of this is reflected in trading for the second half to date with a net private sales rate of 0.63 compared to 0.71 last year, and a cancellation rate of 17%, the same as the comparable period last year. Excluding the impact of bulk deals, the net private sales rate was 0.61 compared to 0.68 for the comparable period.

For the year-to-date, we have achieved a net sales rate of 0.72 , so very similar to the 0.73 at the same stage in 2024, with a cancellation rate of 16% compared to 15%. Excluding the impact of bulk deals, our net private sales rate for the year-to-date was 0.68 against 0.68 last year.

The order book, excluding joint ventures as of the 9th of November is lower at -- sorry, 7,253 homes compared to 7,771 at this point last year with a value of around GBP 2.1 billion compared to around GBP 2.2 billion in 2024.

As you know, we are focused on growing outlet numbers. So I'm pleased that, as you will see in the statement, we are on track with outlet openings for the year. In the second half to date, we operated from an average of 210 sales outlets compared to 208 in 2024, having opened 51 this year-to-date compared to 34 at this stage last year.

Turning to planning. As we told you in October, we are seeing positive signs and a shifting more positive sentiment in many local authorities responding to the changes introduced by the NPPF. The NPPF has reestablished a much needed tension between house builder and decision-maker by reintroducing housing delivery targets and the need for a 5-year housing land supply. And as a result, we are seeing councils respond more favorably to our applications, though timing and resourcing challenges remain.

But we have an example in the Northwest. We've had a site for 340 homes where our first principal application was submitted in May 2023. We have progressed well with engagement but have been frustrated by delays in determination. Confirmation of the NPPF strengthened the principle of this site, and we saw a marked improvement in the engagement with officers and achieved a determination for beneficial development in September this year. This is only possible because of the actions we have taken in the early submission of applications and the tension housing delivery requirements are placed on local planning authorities via the NPPF changes.

We continue to closely monitor and track progress and local authority sentiment on all of our early applications and are continuing to see a shift from red to amber and green. Of course, this isn't universal. So we're not there yet, but the progress we are seeing is consistent with what we expected at this stage. As a result, we continue to believe that the NPPF and the upcoming Planning and Infrastructure Bill will provide the basis for us to accelerate progress in outlet openings, particularly given our proactive and assertive approach that we've been undertaking over the last couple of years.

So we've said today that we continue to expect to deliver full year 2025 U.K. completions and group operating profit in line with our guidance. The current market sentiment is challenging, and we are working hard to build the order book into the year-end. I will update you on the order book as usual in January and then confirm our guidance for 2026 with our prelims in March with the benefit of some early spring trading. And looking further ahead, we remain very confident in the underlying fundamentals of the U.K. housing market with this pressing need for new homes and our strategy for the business to deliver profitable growth and attractive shareholder returns in the medium term.

So with that short overview, I'll open it up for questions.

[Operator Instructions] The first question is from Will Jones at Rothschild & Co Redburn.

I might try three quick ones, if I can, please. First, around, I guess, your lead indicators away from the sales appointments, website visits. Are they tracking similarly to the sales rate?

Second was around pricing. You've maintained a broadly flat year-on-year comment. But just wondering if any change sequentially since the summer and just potentially how you're thinking about possibilities into the new year as affordability potentially improves for customers.

And then the last is around build costs and whether from your suppliers, you've had any early indications on their expectations or hopes for next year?

Okay. Thanks for those, Will. In terms of sort of lead indicators overall, I mean we have sort of significantly sort of uplifted our sort of marketing activity, as you would expect. There's a range. I mean organic inquiries are sort of down year-on-year, but we are seeing a little bit of improvement. Appointments held sort of broadly flat. Website appointments actually sort of looking fairly strong.

So we've got decent leads, we're seeing sort of decent levels of inquiries and visits. What's really coming up from the sales teams there are that customers are not committing, that they're really sort of holding back and waiting to see the outcome of the budget and I think of interest rate trajectory.

In respect of pricing, I mean it has got a little bit tougher. But I mean I think it's still fairly consistent with what we've been saying for a while now. The north is a bit better. We see some improvement in pricing, both the site remains sort of a real challenge from an affordability perspective. We're seeing quite a challenge around chains, a lot of which can be linked back into sort of first-time buyer sort of challenges. So I think the dynamics are very much similar to our discussions in the past.

I think you were asking about sort of the incremental or the sequential possibilities going into the new year. I think the budget event is proving to be sort of quite a pause, whether it's a hiatus or in customer sentiment. We will need to see what the budget sort of elements and the likely impact on sort of customer, and a lot of those impacts could be very individual. But if we believe that, that's a sort of a clearing moment or an opportunity, and particularly, if there's an interest rate cut alongside that in December as many are penciling in, then you will be certainly trying to get on the front foot and lean into the early part of 2026 trading and into the spring budget.

And in respect of build cost, we're still in that sort of low single-digit sort of period, a few sort of ups and downs. We're just entering the period where we would be starting to negotiate with our suppliers well. So it's something I probably can give you a bit more color on in January. But really, even then, there'll still be very live negotiations on our calendar.

Our next question is from Allison Sun of Bank of America.

So two questions from my side. First is, if you can give us some color on your long-term projects, which we understand has been pushed from first half to second half. Is there still progress as expected?

And the second question is, I mean, I don't know if you have any case scenario on what might happen in the budget? Do you hear anything on the stamp duty removal potential? What do you think? And if it has been removed for the Taylor Wimpey existing outlets pipeline, do you think you can accommodate all the new demand potentially?

Okay, Allison. Just on the London projects, I wasn't quite clear, I apologize, on the question. Progress on?

Yes. Yes, I think you mentioned in the first half, there are some big, large projects going on in London, it's expected to -- I don't know, maybe completed in the first half, which has some impact on your pricing, if I remember it correctly. But it looks like the project has been now pushed to the second half? So we wonder if there was an update there.

Yes, yes. Got it. Sorry. Thank you for that. Yes, we did have some delays with the building safety regulator. I know the team have worked exceptionally hard, and that scheme is now moving. So that's very, very pleasing.

In terms of the budget sort of various scenarios, I mean, there's a wide range. I mean clearly, there's a lot of speculation sort of in the market. In respect to stamp duty land tax, many of you will know my view in stamp duty land tax, it's a tax on mobility and it has a distortive effect on the market. I think that we can see that clearly in both ends of the market, at the lower end of the market where we've got effectively overcrowding and the top end of the market where we've got sort of under occupancy and economic and social mobility I think are hampered by stamp duty.

I'd add to that, while I'm on my soapbox, a little bit that I do think that the treasury receipts from stamp duty could be more than recovered just through the level of economic activity from a more free-flowing housing market. That said, Allison, I'll come off my soapbox now. I haven't heard any sort of significant sort of commentary other than speculation in the press around stamp duty removal. But if there were to be any form of demand side, sort of stimuli or removal of some of the friction points then, I think that the scorecard of sites that we have, which includes many sort of multiphase and larger sites, which have the ability to step up delivery should there be a sort of a rebound or a stimulus to demand. It very much depends on the timing of any announcement as to how much of that can be captured in any 1 year. But I think that we would be in a very good position to capture that were it to happen.

Our next question is from Zaim Beekawa from JPMorgan.

Just two on my side is coming back to London, much of a positive impact you see for the business given the affordable housing quota being reduced. And then secondly, if I could push on the potential landfill tax. Is this something that you're still expecting could go through? And is there sort of any indication you could give on how much this would impact your business?

Okay. I mean, I think in terms of the package of measures consulted on our -- going into consultation from the GLA, the reduction in affordable housing from 35% to 20%, sort of reduction in sale and other things, look, these are sort of incrementally welcome. I'm not convinced that they are sufficient to address the significant sort of amount of issues that are weighing on housing delivery in London, which are both supply and sort of demand upside.

As we discussed in October, we are effectively building out of our London schemes. We remain sort of present and open in the market, but we're not seeing anything that we think would materially change our position, and we have a very limited sort of pipeline in London. So I believe a more radical approach to stimulating London house building is required.

In respect of land tax, it's a consultation. That's still -- we haven't had any response. So we've had no closure to that. And there are concerns that a landfill tax could have an impact right across the sector. It's a very substantial potential uplift, and because the impacts are different depending on the topography, the geology, the nature of the scheme, including the level of sustainable urban drainage or protective land like biodiversity net gain that's included, it's quite hard to calculate. But I would point you to the HBF document that they issued some weeks ago, and they're recording a figure of about GBP 15,000 a plot.

Our next question is from Ami Galla of Citigroup.

Just a few questions from me. The first one was on Section 106 take up. Have you seen any improvement in that respect? And post the budget, do you expect that dynamic to become a little bit more easier?

The second one was on the land market. On the back of all this sort of tax changes that have been speculated across the press, have you seen any shift in terms of how the land market is reacting to it and how the land vendors are considering the outlook ahead?

And the last one, I appreciate, on 2026 guidance, I appreciate that we'll get more explicit color next year. But is there any sort of broad view of how we should think about the moving parts in the business as we look ahead?

Okay. I mean in terms of Section 106, I mean the teams are continuing to work with long-established partners to place Section 106. But it is a challenge, and there are some geographies where it's particularly challenging with the absence of any meaningful number of RSLs in the market. And these are points that are being made to government, not just by ourselves but by sort of the whole sector on a very regular basis. So it's hard to see across the board improvement, although there are some localities where there's been a slight easing.

I mean in respect of post budget, I think it's really the formalization of the affordable housing program. That's the dynamic there. And we would hope that sort of the allocations will become more visible, and we continue to seek support from government around utilization of cascade mechanisms and other elements.

Land market shift, Ami, not as dramatic as we saw last year. I mean last year was sort of commentary around sort of capital gains tax. There was quite a seminal moment, I think, for many landowners and just trying to get things done, and we were able to take the benefit of that in some of our negotiations. I can really only bring to mind one sort of deal, it's the landowners focused on the budget. And I think that, that's for more personal reasons than a significant shift there.

And in terms of '26, I mean, you're right. It's a quarter 3 update and we're not going to guide for 2026, although we'll absolutely tell you what we're seeing in the market. But the dynamics are how does the budget leave the customer feeling, what are the sort of interest rate trajectory as we exit the year, how our order book looks as we exit the year and really that all important spring selling season. So I think sentiment is a really strong element for 2026 right across the sector.

Our next question is from Chris Millington at Deutsche Bank. We can't hear you, Chris. Yes. So we'll move on to the next one. Well, currently, there's nothing else in the queue. [Operator Instructions]

Our next question is from Rajesh Patki from Barclays.

I've got two questions, please. Firstly, if you could provide some color on incentive levels. And if those have changed compared to what you reported at the first half stage.

And secondly, sorry to come back to '26, but consensus has about 100 basis points improvement in margins for next year. Would you be comfortable with that given the commentary about sort of prices, underlying pricing being flat and build cost inflation up low single digit at this stage?

So in terms of incentive levels, Rajesh, we have seen them sort of tick up to being broadly in that 5% to 6% sort of bracket through the year, but they're probably sitting at the higher end of that range at the moment.

And I'll pass you over to Chris, who's been very quiet so far on the call, on the second point.

Rajesh, as Jennie has already said, our normal approach to providing guidance for 2026 would be to do it in February next year with the knowledge of the order book that we take into the year and after we've had the opportunity to see the start of the spring selling season. I don't think right now, in advance of the budget, is the time to be making a change to the pattern of when we guide. So we're not going to be giving specific guidance on that today.

But just to try to be helpful, I'll repeat some of the comments that I made at the event in October. Well, I'm trying to be clear but, yes, I think some analysts haven't necessarily reflected them yet. And obviously, that plays through to consensus. So I said short-term uncertainty may well mean that the U.K. volume growth in 2026 is below the straight line run rate to the medium-term 14,000-unit targets. I indicated that the margin uplift from the landbank evolution would be minimal in 2026, more meaningful in 2027 with the lion's share delivered in '28 and '29. And in summing up, I think I noted margin growth stepping up from 2027. And also, obviously, worth remembering that our assumption was of the medium term that the sufficient house price inflation to offset build cost inflation, which in the short term currently isn't the case, as you can see from the statement. So hopefully, that's all clear. But as I said, too early to specifically guide for 2026.

Next question is from Chris Millington at Deutsche Bank.

Sorry, everyone. I'll try again. I've got a few quickly. To talk about the sales rate at the back end of 2024, a lot -- I see year-to-date, you're at 0.73. You ended the year at 0.75. So you had a good run at the back end of '24 to lift that sales rate up for the full year. Can you just talk about quickly what happened? And kind of how you may see that feeding into the order book at the back end of this year? That's the first one.

Second one is just about the average sales price in the second half of this year. I think you've got a block or something completing from the post market development, which takes the private ASP to around GBP 400,000 versus GBP 350,000 in H1. Do you think there's a danger that ASP could shift backwards a little bit as we go to next year, and you don't get a repeat of that London one?

And then the final question I just wanted to ask you is about the order book margins. So not talking about '26, but I remember at the start of this year, I think you said the order book margin was down 50 bps year-over-year. How are we looking at the order book margin year-over-year at the moment, if possible?

Yes. Thanks, Christopher. Good to hear you. I'll pass your second two questions to Chris. But on the sales rate at the back end of 2024, I think regrettably, it's really straightforward, the budget did create a bit of a sort of a hiatus and a slowdown in demand, but it was much earlier. So there was still a reasonable sort of runway in that final quarter of 2024, and that really did drive the sales rate, which was very pleasing. And whereas this year, clearly, we've got much later sort of date for the budget, and it has created -- has cast a much longer shadow I think in terms of how customers are feeling when we saw speculation start right in the summer.

So I'll pass you over to Chris on those other two questions.

Yes. So we continue to expect that the full year blended U.K. average selling price will be approaching GBP 340,000. You're quite right. There was that switch from half 1 to half 2, more completions in the -- well, from Central London, in the second half pushing the average selling price up. The risk is probably to the downside if there are a few more affordable homes in the mix, but we're still happy with that guidance. And then how that plays out into next year, I'm expecting it to be, at this early stage, pretty flat.

And then the order book margin year-on-year, obviously, we're not giving a 2026 guidance today. And relatively small volumes relative to next year, obviously, in the order book because you've got a mix of the order book between what's going to be delivered this year versus what's going to be delivered next year. So maybe ask me that question again when we get to January, and we've got a clean order book, Chris.

We have no further questions in the queue. So I will hand back to Jennie for closing comments.

Thank you, Seth. So look, thank you for your time and questions this morning. Clearly, there are market challenges right now. But we are working on delivering what we told you in October to ensure we're well set up in land and outlets that we need to drive progress. And we'll see you again in the new year. Thank you, everyone.

This concludes today's conference call. Many thanks for joining, and you may now disconnect.

Good afternoon, everyone. It really is fantastic to see you all, and thank you for joining us today. Today, we'll share a clear sense of the journey we're on and why Taylor Wimpey stands out as a compelling investment proposition.

But before we get to the heart of today's presentation, then let me just briefly cover this morning's trading update. It's clear that market sentiment is not as positive as at the start of the year, though we've had a small seasonal tick up from the quieter summer period. Year-to-date, trading is tracking well, just ahead of last year, given the positive start to the year. And you can see that we've reiterated our full year U.K. volume and operating profit guidance. Current outlets were 215 at the 20th of September. Outlets will tick down a little in November. But as we said previously, we will open more outlets this year than last, though weighted to the year-end. And we'll end the year around 210 to 215. And as you'll hear, we are focused on driving outlet progress going forward and increasing average outlets year-on-year.

So moving on to the main session and starting off with the agenda. Overall, we expect to take about 2.5 hours, including a break and some opportunity for questions. I'll kick off by taking you through where we are today and then move on to how well we are set up for the growth phase of the cycle. Critical to this, I will dive into our land bank and the ongoing actions which will drive volume and outlet growth over the coming years and achieve the land bank medium-term target.

Shaun White, Divisional Chair of Midlands and Wales, will then talk you through how we're implementing these actions on the ground in his division, driving more outlets and improving our land bank efficiency. And the whole business is laser-focused here. After time for Q&A, specifically on these sessions, we'll then take a short coffee break.

And next, Stephen Andrew, our Group Technical Director, who many of you will have met at our Sudbury Future Homes trials, will walk you through how we continue to drive operational excellence and build efficiency to support business growth, not least given the continually evolving regulatory backdrop. Getting this right is essential to maximizing returns for shareholders, and I'm confident that we are ahead of the competition here.

The strength and breadth of the Taylor Wimpey brand is a further enabler of our business. And Ian Drummond, our Divisional Chair of Scotland, Northeast and North Yorkshire is going to give you operational insights on how we enable our outlets to serve the whole market with our strong brand. But let me be clear here. Our brand strategy creates clear value for our shareholders.

And then finally, Chris will bring it all together and talk you through the detail of the medium-term targets that we've set out today and the drivers behind each target so that you can fully understand the way we see our business progressing in the coming years and the confidence we have in delivering this. We'll then have a final Q&A. And after that, we hope that you'll join the team and I for some drinks.

So today, you'll hear how well we are positioned to deliver profitable growth and maximize shareholders' returns. First, you'll hear that despite the muted backdrop, we have the land, importantly, with a positive planning position to deliver outlet growth and in turn, drive volume and returns growth. This is without the need for net investment in land. Second, we will demonstrate how we are set up to deliver our medium-term targets. We've identified, invested in and embedded the operational levers needed to ensure that the business is ready to drive profitable growth.

Third, we'll demonstrate the strategic benefits of our single brand. In fact, we are in an excellent position to capitalize on the significant opportunity that exists as we stand here at the start of new housing, land and planning cycles. And by doing so, are confident of creating significant value for our shareholders. At this stage in the cycle, we are well set to drive capital and land bank efficiency, which will, in turn, ensure strong cash generation.

We will also articulate how we are prioritizing balance sheet strength and how our disciplined approach to investment has put us in a great position where we have significant capacity for growth and improved returns, and we reiterate our capital allocation policy, which is unchanged. We set up for through the cycle. And today, we reiterate and explain our confidence in this.

So turning now to the targets. And just to be clear, what you'll hear today has been planned on the basis of current market conditions. Our planned growth is outlet led with assumed sales rates broadly in line with the rates we've seen through 2024 and 2025 year-to-date. There are short-term confidence risks posed by the delayed budget, but we remain strongly confident in the business' medium-term fundamentals and potential. Our plan over the medium term is to grow U.K. completions, excluding JVs, to around 14,000.

I don't want you to think of this as a soft cap on our ambitions for growth though. If market conditions are more positive, we have the clear capacity to go beyond this. We have a great land bank, but it isn't efficient at current volumes. We will make sure that our assets are working harder for our shareholders in this cycle. And we have a much improved planning backdrop, and we are confident that with improved land supply and planning, we can target reduced land bank years of 4.5 to 5.

Protecting and enhancing margin has been and remains a key focus for us, and we have charted a clear path to delivering operating margins of 16% to 18%. And finally, that margin improvement, combined with the accelerated asset turn, supports our ambition to increase return on net operating assets to at least 20%.

So presenting alongside me is, of course, Chris, and we'll also be joined by Shaun, Stephen and Ian. So you'll have the combined benefit of about 127 years of experience, of which 94 have been spent at Taylor Wimpey. This goes to illustrate that we have a very stable management team, which is reflected the whole way through the business to our business unit management teams.

And whilst there are quite a few of us from Taylor Wimpey here today, I think you will also have spotted some members of our senior team here. And if they could stand up, just so you know who they are, we have Dawn Wylie, our Group Land Director. We have Mark Skilbeck, our U.K. Planning Director; Ceri Pearce, our Group Sales and Marketing Director; and Nick Wright, our Group Supply Chain Director. Thank you, guys. So they're on hand, and they're very happy to answer any questions that you have in the break or afterwards.

So the market in the last few years has been challenging for all market participants. However, I'm very pleased with the Taylor Wimpey's performance. And as you can see from the strong proof points on this slide. The quality of our sites and locations has driven an industry-leading sales rate throughout without the need to destroy value by over-indexing on bulk sales. In 2022, I first set out our strategy to improve operational excellence. That mindset is now clearly embedded, and we have significantly improved short- and long-term customer satisfaction, achieving our best ever scores in 2024 in both service and quality.

We have best-in-class build quality. I am particularly proud that we have been consistently recognized as delivering superior industry-leading build quality in the independent construction quality surveys. This is a critical KPI for Taylor Wimpey as it ultimately results in a lower cost, higher quality business. On planning, we anticipate the changes to the planning system early and took steps to maximize value from them. We mobilized our strategic land teams, submitted early applications and got our short-term land teams focused on the opportunity. You'll hear more about that today, but the key point is this. Our proactive approach means that we're already benefiting from the updates to the NPPF and the momentum is building. That's why I feel confident about delivery through the next cycle.

Next, back in 2022, I spoke about being agile. We read the market signals early, and we made the bold decision to pause land buying last summer. It was quick decisive action, which protected both value and margin. We also cut our cost base and delivered meaningful savings through 2023. Reducing land activity wasn't just reactive, it was strategic. And looking back, it was absolutely the right call because significant market uncertainty and affordability issues quickly followed. Throughout this, we have prioritized a strong balance sheet, having returned GBP 1.2 billion in dividends to our shareholders.

And having done that, we started to plan for the next cycle, and we set about strengthening our operational platform in preparation for growth. Through our investment in timber frame factory, along with further investment in Taylor Wimpey Logistics, we've strengthened the critical supply chain enablers that will enable the scale up to support our growth ambitions.

Skills and resources are always a challenge in a growth cycle, so we moved early to ensure that we are best positioned to attract and retain our valued and highly skilled employees. We rolled out a clear employee value proposition, and you'll have seen evidence of this on our increased LinkedIn channel and our continuing commitment to ongoing people development. At the same time, we continued investing in technology and strengthened our customer proposition through data-led insights and best-in-class digital capabilities, which we've talked to you about in depth over the last couple of years. These are all critical enablers to our growth, and we have an excellent platform ready to grow.

So our strategic pillars of land, operational excellence, sustainability and capital allocation are unchanged and are absolutely the right priorities for the group as we look now forward to growth and maximizing returns for our shareholders.

With each housing cycle comes different challenges and opportunities. And on this side, I'll now turn to the backdrop we are facing and how Taylor Wimpey is positioned. In essence, there are 3 core areas. Firstly, supply. Today, the most important element of the operating backdrop is the very positive changes to the NPPF and mandatory housing targets, which are now in place. These drive 2 important outcomes.

First, it has tilted the balance of decision-making back towards prioritizing housing need and reestablished positive tension in the process between applicants and local planning authorities. And we are already seeing early signs of being able to process our existing land bank more efficiently and get on to site.

Second, the changes will, by increasing planning decisions overall, improve the availability of land, bringing more certainty of outcome. As a result, we are seeing a greater number of opportunities going into planning and land availability is improving. In particular, in these early stages, smaller sites have the advantage of being more quickly prepared and are easier for planners to progress.

As a result, we expect to see an increase in the supply of smaller sites in the near and medium term. I am confident of Taylor Wimpey's position here. We are seeing planning applications move through the system, and we are proactively positioned to recycle our capital into new smaller sites where we see opportunity.

Next, let's discuss demand, where there remains significant underlying customer demand, effective demand or the ability to transact has not returned to previous levels, given constraints on affordability, particularly for first-time buyers.

Our plan anticipates that demand remains muted. However, what gives me confidence is our quality of locations, which provide resilience. And the data-driven approach that we've embedded in the business and talked to you about previously has supported value and has allowed us to respond to the market and optimize the balance between rate and price. With this backdrop and the NPPF mandatory housing targets requiring local authorities to deliver more housing approvals, including many in attractive markets, which have seen little new build opportunities in recent years, more outlets will also expand market opportunity.

And finally, on to returns. Land remains a key driver of returns with value realized through planning and effective delivery by an efficient business model. We remain very disciplined here and see significant opportunity to drive returns. We have a rigorous and disciplined approach to land investment embedded within our regional businesses, supported by our divisional chairs, and I sign off every land acquisition. Improving returns as the cycle develops is nonnegotiable, and we are confident of achieving our medium-term targets, including a return on net operating assets of at least 20% as we move forward.

So before I move on to the land section, I would just like to pause and share why Taylor Wimpey stands out as a compelling investment proposition. We've been talking about setting up the business for growth from 2025. And now that we're here, it's the right moment to show you how we're set up to deliver growth, unlock value and maximize returns for shareholders. We've positioned the business with confidence for the medium term.

And as we move through the presentation, we'll bring our investment case to life with tangible examples. You'll notice some icons throughout the presentation. Think of these as signposts to show you how each action will outline directly supports our investment case.

Okay. So in this next session, I'm going to tell you how we're delivering growth from our land bank with a focus on maximizing returns. Whilst land remains competitive in many areas, and there is improving visibility of future pipeline and competitive pressure is easing. Research from Savills in August shows that land supply is improving, which is putting downward pressure on land values.

We don't usually provide details of our pre-land approval pipeline, but I can see that it has a strong number of opportunities at about 58 sites with terms agreed and an average site size of about 210 plots, and that's a marked improvement over recent years. And the low policy and regulation-led viability issues are impacting some locations, our location quality matrix discipline continues to support positive investment decisions in markets we can be confident of through the cycle.

We expect the NPPF to unlock land opportunities and can see evidence of a change in approach from local planning authorities. We are now seeing easier decisions coming through on smaller sites and expect this to continue before maturing into opportunities for larger sites as local authorities look for anchors to their local plans. There is real momentum here. We're seeing the most positive planning outlook since 2012. Mandatory housing targets are restored and there's renewed pressure on local authorities to meet their housing needs. That brings greater certainty in planning decisions and improved land availability, both of which will support a more stable land market. And that's why we're confident in reducing our land bank to 4.5 to 5 years. And more importantly, we're exceptionally well positioned to seize the full opportunity of the new planning cycle at every stage.

So just taking a step back, how do we think about our land position today and what are our priorities looking forward. We have a consistent framework to assess our land position, and you may recall that I presented this in 2022. So let's take each of the measures in turn, starting with length. At the start of the change of the market in '22, '23, I said a slightly longer land bank was a positive given the challenging political and planning backdrop, and it was. It gave us room to act opportunistically at a time when land prices were stubbornly high.

Now with increased housing requirements and an improving planning environment, planning consents and land availability will improve. So our assessment of how long a land bank we need also evolves. By reinvesting land recoveries in a greater number of smaller sites and a gradual shift in our geographical mix moving from the south to the north, we can reshape our land bank and increase outlets without increasing the gross value of land held on the balance sheet.

At the same time, we will reduce our land bank years relative to completions to 4.5 to 5 years. At target U.K. volumes, this equates to 63,000 to 70,000 plots compared to the 76,000 plots held at the half year, with acquisitions running at below replacement level. So to be very clear, no net increase in land bank plots or net land investment is required over the medium term. That's a positive for cash generation and our returns profile over the medium term.

And on next to it. Land cost as a percentage of asking price and the owned land bank was 13.3% at the half year, very low. That reflects our focus and discipline, but it also reflects the weighting to larger sites, which generally carry more WIP requirements, but also have a lower land value.

Then shape. Our land bank is well spread across the country. It's focused on areas with strong population and demographic profiles. Crucially, much of it sits in locations where local authorities lack a viable 5-year housing land supply. One area to call out though is London. We've been cautious there for some time, first, due to planning challenges, more recently because of market viability and rising regulatory costs. Our medium-term strategy there is light touch. We'll complete our current high-density schemes and stay responsive, but we don't expect the environment to support meaningful new opportunities in the near term.

At this stage in the cycle, we see value in continuing the shift towards smaller sites. Growing outlets, expanding market reach and recycling capital faster to drive asset turn and returns. This isn't new and the strategic shift is already showing. There are times in the cycle when large sites create greater shareholder value. They offer long-term visibility, strong margins. They're often strategically sourced, and they serve as an anchor site for our regional businesses. They continue to perform well. And if demand improves, we're ready to accelerate delivery with additional build teams and capacity.

So to summarize, our near-term focus is more on smaller sites, but we expect larger sites to reemerge in the medium term as local authorities seek anchor sites for their local plans.

And now on to efficiency. Carrying a longer land bank is inefficient. And although it has been helpful whilst planning has been tough, this does impact returns. As I've talked about, supported by a positive planning outlook, we will shorten and balance our land bank to unlock growth and returns. This will improve our capital efficiency through growth in completions and land purchases below replacement. We've embedded site level efficiencies and bulk deals, for example. We're not new to these structures and have strong track record with trusted partners, especially on larger sites where they improve return on capital. That said, our clear preference is to plan bulk deals from the outset to capture maximum value.

And then finally, on this slide, to land quality. The locational quality of our sites is excellent. This is a real competitive strength for us in the market. It shows our sales rates, which have remained robust in tough conditions. Our teams buy land well, and we are very disciplined in the use of the location quality metrics. As a result, the majority of our land holdings are in AA to BB locations. I'm very comfortable with the quality of our land, and I'm happy that this discipline is strongly embedded across our businesses.

Turning now to the current land bank. At half year, our short-term land bank stood at 76,000 plots, of which 82% is owned, and we had a strategic land pipeline of 135,000 plots either owned or held as options. The mapping on the slide shows a few things. Firstly, it shows population density and distribution. The deeper the red, the higher the population density. This is absolutely key for market absorption rates.

Overlaid on the map on the left, we've mapped our short-term land bank and separately on the right, our strategic pipeline. Our assets are held in good markets with access to significant areas of market demand. Our strategic pipeline is an area that we have a very strong track record of delivering typically over 40% of our completions originating from this source. It remains a great strength to our business, and you'll see how we've been driving this ahead of the NPPF changes kicking in a little later.

This slide takes us on a deeper dive into our owned land bank, giving you a more granular view into how we manage land bank assets to protect and unlock value. But we can't ignore planning in this regard. Planning is part of our everyday business, but we've lent into the positive NPPF changes. Last year, we launched a consistent and coordinated effort to benefit from the emerging planning opportunity across the business, codifying our processes. We actively manage and monitor all applications and progress to outlet openings, focusing on areas of delay and performance improvement strategies. We've introduced best practice tools to reduce delays in securing implementable planning permissions and tangible deliverables for our teams that are monitored closely by our management teams.

Before we dive in and not on the slide, I just want to briefly highlight the opportunity of our controlled land bank. At the half year, this comprised 14,000 plots, all with either detailed or outline planning permission in place. So that's a strong position. But let's turn to the foundation of our confidence, the owned land bank, which is shown on the slide. This stood at 62,000 plots at the half year. The blue on the left-hand side shows the 35,000 plots, which have detailed planning permission. These are either live sites or quickly on the way to being open outlets. They're implementable, straightforward and represent a healthy position.

On the right-hand side of the slide, in green, we currently hold 25,000 plots in our owned land bank with outline planning consent. This segment grew in 2021, peaked in 2024 and is now beginning to reduce. That shift reflects both the evolving planning environment, stretched local authority resources and strategic approach to changes in legislation that have influenced how we manage later phases of our sites. Briefly, by securing detailed consents for early phases and keeping later phases in outline, we can maintain significant flexibility through planning and regulatory changes whilst protecting long-term value, active asset management in a dynamic environment.

So there are 3 different elements to this classification. Firstly, we have 13,000 plots with outline planning consent, which are part of multiphase sites. These sites already have phases with detailed planning permission in place. The principal technical and design issues are resolved, and they offer a clearer path to planning than a new location or application. They give our teams significant optionality. They can bring phases forward if demand improves, deliver multiple factories while flexing schemes for new regulation when necessary without triggering new costs and obligations. This segment is a proven reservoir of opportunity from which our teams draw as sites progress.

The second segment of 9,000 plots are those consents for single-phase sites moving their way through the planning system for reserve matters. Encouragingly, we are seeing momentum here with several sizable decisions going our way in recent weeks, but I will leave it to Shaun to give you some examples from his division. And then thirdly, there are 3,000 plots, which relate to multiphase sites yet to achieve their first detailed planning permission. These are recent acquisitions having been matured from our strategic pipeline and secured on good terms around the time of the 2024 budget and are progressing to plan.

And finally, we have 2,000 plots in resolution to grant shown in gray. This is a fairly dynamic part of our land bank, which are making their way from resolution to grant. Some will drop into the detailed planning permission part of the land bank, some into the outline. Our planning and land bank profile reflects a disciplined asset management strategy, one shaped by planning activity, but also to an extent, reflects the mix of larger and more complex sites in our portfolio.

As I've said, this land bank is the foundation of our confidence, not just in the near-term completions, but in driving sustained growth. As we continue our focus on increasing the number of smaller sites, we will see a meaningful improvement in overall land bank efficiency. Smaller sites move through the planning and development cycle faster, allowing us to recycle capital more quickly and reduce the time plots set in the land bank. Supported by the current planning environment, this transition supports a more agile, capital-efficient model, one that enhances delivery, improves returns and expands our market reach.

And that deep dive, I think, sets me up nicely for this slide, which sets out the land and planning status as of August, supporting our medium-term growth to 14,000 completions. Our existing land bank provides strong visibility and assuming no major market deterioration, we're confident on land pipeline is delivering outlet growth and volumes. So breaking it down, near-term volume growth is already secured. We're well positioned for 2026 completions in terms of land, planning and ownership. We also own and control everything needed for 2027. Most of the land we're approving now, therefore, is typically for delivery from 2028 onwards. So the key takeaway from this slide is that we are in an excellent position to open outlets and deliver on our volume growth aspirations.

Turning now to our strategic land position. On the map, focusing on England, everything that isn't dark blue represents an area without a 5-year housing land supply and therefore, an area of opportunity under the NPPF. We have real breadth and depth in our strategic land pipeline. The map on the left demonstrates this. It shows that substantial amounts of our strategic pipeline are located in areas of opportunity.

In the short term, those local authorities without an effective 5-year land supply are going to need sites to fulfill their obligations in the near term. The location of our existing strategic sites under management, therefore, offers great opportunity and a competitive advantage. We are already active in these locations with sites already secured and under active management with relationships already established with local authorities, and this has provided us with the opportunity to act early.

This is only possible because of our consistent approach to investment in strategic land, which has given us the platform to leverage these positive changes. So as you know, at half year, we already had around 29,000 plots in the planning system for first principle planning. These are imposed on the map on the right-hand side.

As a reminder, these are over and above our business as usual applications for variations and reserve matters for detailed planning permission to start work. We closely monitor and track progress and local authority sentiment on these applications and though not universal, we are seeing positive momentum pick up as the year has progressed. So this slide is all about getting ourselves into the best position to benefit from the new planning environment and continuing to build momentum in the business. We are seeing a step change in activity.

So focusing on our strategic land pipeline activity, the graph shows the early actions taken in anticipation of the NPPF in 2023, '24 and the first half of 2025. If I direct you to the chart on the left, in addition to our existing 29,000 plots in planning, which include applications made up to half year, we are well advanced with plans to submit a further 36 applications in the remainder of 2025, shown in the blue part of the bar for 2025 with an average site size of about 197. Naturally, the teams are already working on the 2026 pipeline developing behind these applications. And as of today, our assertive application strategy is targeting up to 28 further applications.

That's the final blue bar on the chart, again, above business as usual. To see or set this activity in context, around 40% of our strategic pipeline is already in or in preparation for the submission of planning applications in the next 18 months. Our ambitious program will run until 2027. We are acknowledged active managers of our whole strategic land pipeline, but this represents an exceptional level of application activity over a short time frame. We are strategically advantaged here because of our strong and experienced teams. This work takes time and realistically, applications must continue to be prepared with a view to an ultimate appeal, but our strategic pipeline provides an excellent start.

If I turn your attention to the chart on the right, we've had some small early wins. And though there are risks, of course, our current assessments are that we should see an uptick in decision-making towards the end of the year. We are closely monitoring 13 sites expected to go to planning committee for determination later this year. And we have 41 other sites expected to go to planning committees for determination during 2026. That is a step change.

We expect the planning environment to drive more smaller site opportunities in the early stages of the new NPPF as a way of delivering homes more quickly in advance of new local plans, but we were not waiting for the NPPF. We've been driving a focus on smaller sites in our business via our regional investment strategies and land search activity, turning the dial since returning to the land market at the start of 2024, and we are seeing results.

By way of illustration, you can see in the green box that the average size of site approved between 2020 and 2023 was 282 units, whereas since 2024, average site size has been 231 units. So you see it's not such a big change in site size terms, but an important one, which over the medium term will support the alignment of our land bank to match current market conditions. In fact, if we excluded the 5 larger sites that we drew down from our strategic land pipeline, the average site size was 184 since 2024.

But the reason I'm making this point isn't to push the average site size down further, but really to illustrate that we remain opportunistic, and we have the ability to invest in larger sites should strong opportunities be presented in the market. By averaging down the site size of our investment as described, we can grow our market breadth, grow our volumes and increase our efficiency without net land investment.

Looking to outlets in the medium term, we do not expect in-year progress to always be linear, but subject to market conditions remaining stable, average outlets will grow year-on-year through the medium term. Current outlets were 215 at the 20th of September. As I said, outlets will tick down a little in November, but we will open more outlets this year than last, though weighted to the year-end, and we'll end the year in the range of 210 to 215. And as you will hear, we are focused on driving outlet progression. And going forward, we'll increase average outlets year-on-year.

So let me just pause and sort of pull this all together because what we have just covered in the last 6 slides demonstrates the scale of the momentum building across our land portfolio. Here are the 5 key sources of land that will drive our future outlet growth. Our owned land bank, the foundation of our growth with significant flexibility to accelerate further in the right market conditions. The controlled land bank with around 14,000 plots already progressing into the effective land bank. The already live strategic planning pipeline of around 29,000 plots in the system for first principal planning determination beyond business as usual. The short-term pre-approval land pipeline with terms agreed and though subject to due diligence and appropriate approvals represents momentum in the short-term land market.

And finally, continuing our early actions in liberating our strategic land pipeline, actively progressing to planning and unlocking future potential. Together, these sources represent significant momentum and give us confidence that we will grow our outlet numbers, support higher volumes whilst unlocking the value of our existing land, reinvesting land recoveries into smaller sites and increase efficiency by reducing land bank years. And by so doing, enable us to capture opportunity across the cycle.

So just switching topics now as I wind up my section, I want to make a point or 2 here about brand. Our single unified brand is a deliberate strategic choice that delivers real value and brand recognition and efficiency. This is important in a market where secondhand is our main competitor. And ultimately, customers still are primarily driven by the balance of location, affordability and space. It supports us across a market ranging from starter homes to 5- and 6-bedroom homes and offers cost and efficiency savings beyond just marketing costs. But it isn't about brand alone. It's about our whole approach, how we assess the available market opportunity at a local level.

So we've spoken already about our location quality matrix, and you will have heard from us in the past about using data to understand the characteristics of the catchment of demand and defining the optimum house price -- house type mix and specification that is right for each location. So a strong strategic brand offers high recognition, but the offering is honed locally in the knowledge of the site and its specific market characteristics. That said, we do not take anything for granted, and we'll continue to invest in further elevating the Taylor Wimpey brand. I'm going to leave this to Ian to demonstrate our brand ethos with some examples later.

So bringing it all together, we are well positioned to deliver growth and maximize returns as we move into the next phase of the cycle. We have a clear path to increase outlets without net land investment by unlocking the value of our existing land and reinvesting land recoveries into smaller, faster-moving sites. Momentum is building, driven by a targeted and proactive strategy and a more supportive planning environment. Our single brand is a strategic asset, delivering recognition, efficiency and reach across all our customer segments. And finally, we have the operational levers in place to convert these opportunities into profitable growth.

So I'll now pass over to Shaun, who will bring a number of these points to life with some operational examples from his division. Thank you.

Good afternoon. So you've heard from Jennie on our strategy to target improved land bank efficiency. And it's my job to bring this to life and to show you how we are applying this approach to my division and give you examples of the progress we are making as well as highlighting the future opportunity.

Starting with a quick overview. My division spans from South Wales on the Western side all the way across to Lincolnshire in the East. On the southern edge, we go down as far as Northamptonshire, Worcestershire and Warkwickshire. And on the northern boundary, we trade in Derbyshire, Nottinghamshire, Staffordshire and Shropshire. We engage with many local authorities across the division, including the mayor of the West Midlands Combined Authority. And throughout the division, the majority of our build activity is focused around the major population areas and infrastructure links. Average outlets at the half year were 45, and we are currently trading off 46 outlets. We completed 2,000 homes last year, and we are well on track to increase that by around 10% this year.

Picking up on what Jennie outlined earlier, for some time, we have been focused on adding smaller sites to our portfolio to drive growth in outlets and completions. Smaller sites will improve our efficiency of our land bank and support the larger sites that we already have in our short-term portfolio and the ones that are coming out of our strategic land. There are still some larger sites such as our Northeast Card Scheme, which had excellent opportunity, and we hold that about 1,500 plots in our own land bank, and this is in an area of significant land scarcity. This site is, therefore, a great opportunity for us and an opportunity we will continue to have the capacity to take.

However, we are now in a period where the planning system is likely to favor smaller sites. Since the issue of the draft NPPF, we are targeting our land searches on local authorities that are embracing the change in planning approach, those with a less than 5-year housing land supply, including targeting the gray belt areas. To date, we have seen good signs of progress. We currently have a pre-land approval pipeline of 14 sites, averaging around 138 plots, whereas a year ago, we had 8 plots -- 8 sites, sorry, at an average size of 227 plots.

We want to ensure that we can be the solution to the local authorities' housing target shortfalls. Whilst we are ensuring that our location matrix supports every acquisition in every area, we are always mindful of the locational quality. Since the changes to the NPPF, land availability in the open market remains steady. We have not yet seen an increase in overall supply. And as Jennie outlined, we expect to see progress here as planning reform begins to impact and my teams will continue to track future opportunities coming through the planning pipeline. The strategy to target smaller sites will obviously drive our outlet growth alongside helping our financial metrics by being more WIP efficient and driving a quicker asset turn.

At this point, it's also worth highlighting that we are driving engagement with key landholders and promoters. We recognize that the value of political engagement, and we manage this closely because it is important given the relationships and contact points result in increased opportunity. Importantly, we have experienced and settled teams across the division that are driving this. So we're already well progressed on this journey to drive growth in my division. We have the right strategy and the right people in place, and we're already seeing signs of progression.

As Jennie outlined, we have a coordinated approach to land strategy to drive progress through the business, and I will now walk you through how we're applying it in my division. Firstly, our teams have reassessed the land strategies and are targeting specific local authorities where land supply shortages and local demographics are favorable. We have also reappraised all of our strategic assets planning provenance, for example, highlighting the sites with potential grey belt designations to assess whether a faster planning program is possible. This enables us to identify the sites with a better opportunity for faster progress through the system.

We have accelerated and submitted early applications as part of our planning strategy alongside the NPPF changes. This year, in my division, we have already submitted 8 strategic sites planning applications in front of our initial expectations, and we will submit another 8 in the final quarter of this year. From a short-term perspective, we purchased 10 sites in the second half of 2024 with the expectation of getting 8 of them through planning this year. 6 have already been approved and the final 2 are very close to approval.

From experience, the planning process in the first half of this year has been better, but there is still a variation in the level of service between local authorities. This improved service needs to be maintained as more applications enter the system. As part of the planning approach as well as a reflection of the more positive planning backdrop, we are seeing a strong increase in engagement with local authorities.

In fact, we were recently approached by Solihull Council and asked to submit an early application on one of our strategic assets. This not only is beneficial to us, but it helps them manage where they are going to deliver houses in their boroughs. It protects them for speculative applications in areas where they would rather not have housing. And from our perspective, it accelerates the release of outlets.

This may sound unusual and improved sentiment is not universal, but we are confident in the quality of our proposals and believe that they will translate into opportunity because local authorities realize they have to move the dial on planning to meet the government's needs. And in most cases, they would rather do this with a reputable and trusted partner.

So to summarize, we are driving outcomes with a targeted land strategy. We are aligned to the changing planning backdrop, allowing us to accelerate the right applications. And our approach is resulting in stronger engagement, improved sentiment with the local planning authorities.

Okay. On this slide, I just wanted to give you a sense of progress. Our pipeline gives us confidence that we can grow new outlet opening strongly in the years ahead from the low base of '23 and '24. On this chart, 2023 and 2024 reflect the lower impact of slower land buying and a difficult planning backdrop. But you can see there is a clear progress reflecting in the strong land investment in 2024. We expect to open 13 outlets this year compared to 9 in 2024. We are planning to open a further 17 next year. And we are currently seeing these progress well through the planning system. With these outlets, we will be on site quickly due to the smaller nature, requiring less infrastructure. And as the land has been bought well, these sites will drive our margins in the medium term.

For the larger sites in our portfolio, we have the ability to drive them harder with extra factories and in selective cases, dual outlets. The faster pull-through of strategic land will help us drive the number of plots coming from this source from the division's current 30% to around 50%. The clear message here is we have good visibility of the progress in both the short-term and long-term land banks, underpinning our confidence in outlet growth and in turn, driving an increase in land bank efficiency and WIP turn as we pull through the smaller outlets.

Okay. With my first case study of 2, I will illustrate one of our opportunities to cycle into smaller outlets. The NPPF signals an opportunity to drive into these and the benefit is the lower infrastructure cost upfront and therefore, a lower WIP investment throughout the project. This will also offer us a quicker route to outlet and sale. A good example of this is our site in Redditch, Worcestershire. We contracted this in the second half of last year with a view to submitting planning as soon as possible after acquisition. The local authority welcomed the application ahead of expectations, and the application was approved in June of this year.

As already mentioned, this approach to gaining planning on sites already designated for housing is the best defense against unwanted speculative applications for a local authority. Building has already started ahead of our estimate at the time of purchase with the first sale expected early next year. The build program has taken us around 2 years -- will take us around 2 years, meaning we will quickly generate and recycle cash for investment elsewhere.

By way of an example, the normalized WIP for a site of this size is budgeted around GBP 4 million. This site has seen a markedly quicker progress than has been possible over the last couple of years, and it could be helped further by an improved market. We are already progressing similar opportunities and looking to build on this positive experience. The message again is smaller sites that are aligned to the NPPF opportunity and local authority need will increase outlets and a better WIP turn.

So as stated, we still see excellent value in the larger sites for several reasons. While small sites will enable us to cycle into the capital quicker, we can target increased asset turn from our larger sites such as Burleyfields in Stafford. Sites like this highlight other aspects of our capital-efficient approach as well as the flexibility afforded by our current sites. Burleyfields is a 163-acre site, delivering around 1,500 plots that we started promoting through the planning system back in 2011. We started building on site in 2019.

Currently, we have 2 build teams, both delivering up to 75 plots a year to drive build efficiency, and we have seen a combined sales rate of around 1.5 homes per week. Over the 5-year period on site, the rate has been supported by some small bulk sales with 5 deals being completed. These range from 12 to 50 plots. This approach helps our on-site build efficiency, and it also helps us to manage build cost inflation risk, which comes from selling too far into the future.

Just to slightly step back, I thought it would be helpful to show some numbers on how Burleyfields has progressed in terms of investment. Back in April this year, work in progress was around GBP 13.6 million per outlet. This was at the high point after the second phase of infrastructure implementation. If I look at the site now, WIP currently sits at just over GBP 11 million per outlet, and it will fall back further by the end of the year. And by 2027, we expect it to be down around GBP 8 million.

You can see how WIP efficiency progresses through large sites and why a pivot towards smaller sites, a journey we have been on for some time, will release further capital for investment in the business. More generally, we always carefully consider the cash flow characteristics of our larger sites, and we have sold 2 land parcels at Burleyfields already. These were both in the orange parcel around the local center and the school, which are the light blue and red areas, which has helped us bring cash forward to meet infrastructure requirements and improve our return on capital. We timed the sales to when the green infrastructure and players were completed at the front of the site to maximize value. This gave us a chance to open our sales area prior to competition being on site, so we could take advantage of the initial market demand as well.

Stafford continues to be a good sales market for us and because of its good transport links and employment in the area. Should there be future growth in demand, we have the ability to turn up the dial and take advantage of the market by securing our future phases reserve matters planning ahead of our need and maintaining a structured approach to placemaking and infrastructure delivery. So while we are pivoting towards smaller sites in order to generate outlets, we are pleased to have excellent larger sites, which provide visibility and potential additionality.

So to summarize, what should you be taking away -- what you should take away is the tangible progress we are making. I can clearly see the momentum in terms of new land and outlets. This is something we have been driving since the return to the land market at the start of 2024. And this is a balanced approach, which identifies the opportunity for the new planning environment and prepares us for profitable growth.

I'm very confident that this is just the start. The strategy focused on smaller outlets is attuned to best align us to the need of the local planning authorities, and the proof is in the more positive engagement we are seeing from local councils. However, this is balanced with progressing our excellent larger sites in areas of land scarcity that offer great opportunity for my division. As ever, relationships are key, particularly those with key landowners and other stakeholders, and I have spoken about how we're ensuring that our teams are focused on maintaining these and that they are delivering opportunity. The ultimate aim is driving growth and improving balance sheet efficiency over the medium term.

To conclude, my division is focused on continuing this momentum, and I can see tangible progress in the division and look forward to taking advantage of future market opportunities.

I will now hand back to Jennie for Q&A.

Thank you, Shaun. So I'm happy now to open up for questions on this first session, after which we'll grab a coffee.

It's Allison from Bank of America. Two questions from my side. So on the smaller site strategy, I wonder because you would expect more supply of this kind of sites, but do you also expect more competition? Because I would assume some SME developers might be able to compete in those smaller sites as well. That's number one.

Number two is on the planning because I remember previously, we -- the question is, when do you expect the planning to have a material impact on your P&L? And I think that time everybody consensus is probably going to be late 2026 or even '27. But right now, do you think right now, the time line probably going to be sooner than you have expected? Because I see it was a positive progress on the planning right now.

Okay. Thank you for that. I mean, firstly, in terms of competition, yes, one would expect there to be sort of equal competition, but we would expect to see an increase in smaller sites. If you think about planning as a cycle, the same way as you think about housing cycles, in this early part of the NPPF, what local authorities and what Shaun described for Solihull, for example, is they can take an offensive, defensive approach where they don't have a 5-year housing land supply. But they have to progress it quickly. They have to be able to demonstrate, for example, in the face of the inspectorate that they have an effective 5-year housing land supply. And the fastest way for local authorities to do that is to process smaller applications.

And look, we've got proof points and history to demonstrate that, that will be the case also. But we are seeing promoters, landowners, ourselves submitting more small applications into the system. And so even if there continues to be competition, and we're not expecting no competition, we expect to see an increase in the overall supply. And in terms of our medium-term targets, it's probably worth sort of reaffirming that we're not expecting and we haven't planned for land prices to fall, for example. So although Savills are reporting some downward pressure on land prices, that's not built into our assumptions.

On planning and material impact, we are already very well set up for 2026. You'll have seen on the slide that we have all the land planning ownership in place for 2026. So we see this continuing as we go forward. And as I also mentioned, Allison, really now, the land that we're buying now is for -- typically for 2028. Obviously, there's benefit, we have the potential to pull that forward, which would be helpful, but that's not sort of built into our assumptions. But we are starting to feel momentum picking up. And you can see that we are expecting to see decisions starting to move progressively over the coming months.

And I mentioned just very quickly in passing, we've had a few fairly positive wins in the last couple of weeks -- and those are applications which authorities have processed really very quickly. I think, Shaun, your Redditch example, it was processed in about 6 months, which is what I would consider normal in my 30 years of experience, but in the last 5, 6 years is quick. And we've seen some other applications progressing similarly quickly, particularly where local authorities are feeling under pressure for their 5-year supply. Okay.

Zaim Beekawa, JPMorgan. The first one would be just given the positive planning environment, why is 4.5 to 5 years the right number? And could it be lower? And then secondly, on the strat land conversions, I think you mentioned 40%. Can you just remind us on the economics of that it has on margins? And are we still expecting it to be 40% going forward?

Sorry, your second question was about the...

The strategic land conversions.

Okay. So 4 or 5 years, it's the comfortable sort of position that the industry has operated under in the past, and we would see that if it was less than 5 years, 4 years owned, 1 year in control. It allows us to make good investment decisions rather than sort of precipitous decisions, perhaps with not sort of the best of protection in valuation. And it gives us an opportunity to sort of mature sort of through the cycle. So 4.5 years is getting, I think, to that tighter. It's absolutely deliverable, but the 4.5 to 5 years, I think, is entirely achievable, and something that we will have operated on the past with a functioning planning system. And that's what we're seeing now. We're seeing the planning system starting to -- sort of the friction starting to move.

In terms of strategic land conversions and completions, we've been as high as sort of 52%, 53% in terms of strategic land completions in the past. It's been dropping off. That's entirely reconcilable with the challenges that we've seen in planning over the last sort of 4 or 5 years in particular. We're sitting at around 40% now. I expect in the sort of 2026, perhaps that to drop just a little bit. But then it would be my expectation that we would see that percentage climb again.

Will Jones from Rothschild & Co, Redburn. A couple, please. The first, just around land availability where you've made the point of improving planning generates better land supply. Just when we put our historian's hat on with regard to when NPPF came in 2012 onwards, how quickly do you usually have to wait until that better planning environment feeds land supply? And the second, just around strat land again, I think you outlined 14,000 applications that could be decided upon by the end of next year. Is there any risk you end up with too much in your favor if planning does ease a lot and it could compromise some of your efficiency metrics? Or can you control the flow of those if need to be?

Okay. From a 2012 perspective, and a lot of you know the type of business that I was involved in back then, the transmission rate can be quick, and it can be quicker in the smaller sites. So this is real lived experience, and we're now seeing that starting to play through in the planning system and the way that we're seeing our own planning decisions coming through.

I think in terms of transmission rate into completions, I'm still very much where we were at the start of the discussion about NPPF changes last year that really the first decisions that are being made are those that were applications in the system before NPPF existed. And we are seeing those, a lot of appeal decisions, a lot of decisions starting to come through. We wouldn't really expect it to be hitting volume completions until '27 and beyond. And as I say, we're in a really good place for 2026 and also a very good place given how far out we are for 2027.

In terms of the strat land and the acceleration we have, we've run some scenarios if all my dreams came through and everything dropped in. You'll know the strategic land, there's a degree of acceleration and deceleration that we have control of, Will. And so we'll be watching that carefully. But we have -- we continue to have the capacity as a business to draw down sort of good opportunities. But I'm comfortable that we've got good levels of control around those.

Ami Galla from Citi. A few questions from me. The first one was on your targets. When you talk about medium term, I think in one of the slides, you kind of listed out your time line till 2029 on the land bank. Is that what you -- we are looking at coming closer to the midterm level? The second one is on outlets. Like when we think about 14,000 units and we kind of back work what outlets are needed to kind of settle into, is 280 largely the level that we can realistically expect to normalize to into your growth journey that you talk about?

One technical question on your current landbank. When you talk about this focus on small sites, can you give us some mix as to where does the current landbank, both on owned and controlled, the mix between large and small that sits today? And a follow-up from the question on competition in the small site, what sort of comfort can you give us in terms of achieving the right hurdle rates when you're looking to acquire smaller sites?

Okay. So in terms of medium term, I wouldn't state an end date. And certainly, we tried to sort of extend the RO there. But look, 3 to 5 years would be what we're working on. On your back solve, my number would have been a bit lower, probably 270 to 275 based on an estimation of average outlets this year of sort of 205 to 210. But look, that's the -- you're in the right ballpark, certainly, Ami. And we are driving the business to increase our outlets to get to that quantum of level.

For small sites, and look, maybe this is a good place for me to say, Shaun gave a site of about 100 units. Small for us can also be 200, 225, maybe around that level. So we're talking about smaller, not pivoting into very small. And that's -- we're a volume housebuilder, and we want to ensure that we're driving good value out of our sites. So at that level, there's still a reasonable breadth in the market that we would be able to generate. I believe that we can be really competitive at that level.

And there's -- I'm not expecting, as I say, there are not to be others in the market, and we factored that in. And we've, as I say, got that pre-approval pipeline with terms agreed, offers accepted that demonstrates that there's capacity for us at that point of the market. And then in terms of sort of small -- at the smaller end of sites, if you look at sites that are sort of sub 300, 370 units, I would say about 60% or more of our land position sits in that scale of site already.

Alastair Stewart from Progressive Equity Research. A couple of questions. You mentioned that competition had dropped and land supply had gone up according to Savills. Was the falling competition a case of the absolute number of competitors falling? Or is it just there's more land around? And if the competition has dropped, who's -- the absolute number of competitors has been dropping, which type of companies are falling out of the bidding as it were? And the second question is you implied the preponderance of small sites recently was, let's say, the low-hanging fruit had been addressed first. At what point -- how far away do you see the planning pipeline going back to larger sites? And what's your optimum site size?

Okay. Look, I'm not going to comment on, Alastair, who's dropping out of -- Look, there's a range of factors sort of happening. We've been very active in the planning environment. We're seeing a lot of planning promoters, land promoters and landowners also sort of active in the market. It is -- and it will always be variable. And if we look at the map of where the 5-year housing land supply stress is, there's a level of dynamism around that. And those -- we will operate around that dynamism as well to ensure that we have a good level of opportunity to achieve sites.

But land supply will increase, and it is visible that the small sites are seeing -- those smaller sites are seeing much more activity and there's more availability of those in the market. From when would I expect the sort of small sites, if you were in a fully matured planning environment, what you'd expect to see is, at this point, the small sites being available. Think of it again as that offense, defense for local authorities trying to fill their 5-year housing land supply and ensure that they're getting developments in areas that they choose rather than being chosen for them by the inspector.

As they move to prepare their local plans, then the tendency is for local authorities to look for, I call them anchor sites, so larger sites to underpin their local plan. What we missed in the last planning cycle was a degree of political consistency just as we were getting to a point where local plans were stalling. You would have expected that as local plans were delayed and their 5-year housing land supply was dissipating that they would have been forced to take some small sites again while waiting for their plans, but they were giving a degree of protection.

There was the reduction in the housing numbers, the tension that was delivered by the NPPF was wound back just at the point where you would have considered to see those coming through. So even as the planning cycle matures and larger sites become more available because of the way that local plans operated, you'd still expect to see smaller sites being used on that offense, defense basis by local authorities through that period. But it's reasonable to assume that larger sites factor in the medium term.

And if we look at the transition arrangements and Mark Skilbeck is around and he's the expert in this, that you really -- we would expect that to be sort of '28 to '29 as local authorities are bringing their local plans. And in the meantime, many of them will need to ensure that they've got smaller sites driving their land supply. And I think that probably covers all your questions, Alastair?

Optimal, yes, optimal site. Well, look, I do want to make it clear. We're not lurching here. We're rebalancing. You've heard from Shaun that we still see benefit and opportunity and optionality in our larger sites and the ability to scale those up in the right market conditions. We're fine-tuning. And we can see that there's an opportunity for smaller sites and that they'll serve a purpose in helping us drive more outlets and as I said, more market opportunity during a period where market demand is perhaps a little bit more muted. Aynsley has very much been asking. No, no, go ahead, this time.

Charlie Campbell at Stifel. I've got 2, maybe best to do them one at a time. I guess sort of just in terms of sort of what's not in the strategy maybe, and this is an odd question to ask, but it seems to me you want to persist with a generally sort of quite a high sales rate compared to the peer group and the industry perhaps. I wonder if a lever that you might have pulled is to sell more slowly and try and get more price inflation, and that might be a way of managing as well. So I just wonder why that's not something that you are thinking about? That's the first question.

I think that we're fairly good, Charlie, at managing our rate and price. I talked a little bit about the systems, the investments that we've made in dynamics and other sort of platforms to support us in that process. I do -- I want to repeat, I think that we, as a business, choose really good quality locations. It's part of a process that's well embedded in our business. And I'm sure those of the DCs around the room, we are happy to talk to you at the coffee break about that. So I think that we really do optimize the location and we optimize the mix in order to ensure that we're achieving that strong sales rate. And although we always have to watch price, I don't think that we are giving away price to achieve our build rate. I think that we're working hard to ensure that we're driving that sales rate based on really good fundamentals of our locations.

And then the second one was you mentioned sort of almost in passing that you'd tilt the landbank sort of away from the south and into the north. I mean, as we think about kind of the 4-year progress, should we think about the business being materially more weighted to the north in 3 or 4 years than it is now?

No. And look, the reason that I haven't sort of given it too much volume is, again, we're talking about rebalancing. We had some really good opportunities in the South. It's meant that we're carrying just a bit more heavily than we think is necessary. There is now a greater opportunity in the North. You can see that from an affordability point of view, it's more robust. And from a planning perspective, some areas that had relatively low housing numbers are now coming back with opportunity. So rebalancing, we're not lurching. This is really just ensuring that we're smoothing out the distribution of our landbank. Aynsley?

Aynsley Lammin from Investec. I think we've just got 3, please. First of all, interested to hear a bit more color, if you could elaborate on kind of autumn selling season, how that's been relative to -- have we seen a step down in confidence? Are you having to work harder incentives and pricing, et cetera? Second question on your targets. I mean, how much of the constraint was around the balance sheet? Did you start with the dividend first and get back to kind of 14,000 target completions given what WIP you might need, et cetera? Or actually, was the balance sheet not a constraint at all given release from the landbank, et cetera? And just on 2026, given what you said, you kind of sound confident that site number -- average site numbers in '26 will be up year-on-year, even though you're not willing to give a number. Is that fair?

So I think, first of all, I mean, I just -- we give obviously some current trading this morning, but it's only sort of 6 weeks before we have a trading update again. Look, there is definitely a feeling of hesitancy at the moment sort of related as far as we can see to some of the sort of budget or the pre-budget sort of discussions. We talked at the half year about sort of resetting our campaigns and sort of leaning in, stepping into the marketing around the customer environment, and we continue to do that. I'm not going to get drawn on incentives. We'll talk about that at the trading update in November.

Around the targets, I'm absolutely clear that we have built our targets, Aynsley, in the appropriate way. But I'm going to leave it to the second session when the guys will take you through some of the other bills, but Chris will take you through the medium-term targets. And I think that you'll see the very logical way that we've built our medium-term targets. And in terms of 2026, I want to again be really clear that we're not guiding on '26. This is very much about our medium-term targets today. But you have heard me talk about our intention to grow average outlets year-on-year, and that would include all things being equal in the market to 2026.

And then I'm going to -- maybe, Sam, after your questions, we'll stop for a coffee break because I don't want to be responsible for the day running out of control. And if you just make a note of your questions, and we'll deal with them in the second section.

Sam Cullen from Peel Hunt. I've only got one actually. Just going to your comment around no assumption an improvement in sales rate and then also a move back towards larger sites perhaps in '28, '29. Is there, therefore, an implication that margin -- net margin should improve '28, '29 versus '26, '27? And what's the gap there to keep the return profile the same?

Chris will take you guys through the margin progression comment. What I will correct is the 28, 29 larger sites, that's not larger sites landing on the balance sheet or larger site. That's larger sites making their way into local plan processes to come out later in the planning cycle. So I'd just try to separate the two issues. I think that we will talk about margin progression. And I think that you will see that there's margin progression, but we wouldn't be leaning into the large sites as part of that. Potentially, there's some sort of positive benefit. But the two things actually is slightly different. Local plans starting '28, '29, delivering later.

Yes. Okay. All right. Thank you very much, everybody, for your attention. Really appreciate it. And I think we're going to take about 15 minutes for a coffee, and then we'll get started on the second session. Thank you.

[Break]

Good afternoon. I'm Stephen Andrew, I'm the Group Technical Director. Today, I would like to share how we are positioning our business to thrive amid regulatory changes.

So before I begin, let me just lay out the way we think about regulatory change at Taylor Wimpey. We approach collaboration and engagement as core strategic levers for shaping the future of housing delivery. We take a leadership position, maintaining strong partnerships with key organizations, including HBF and Future Homes Hub, where we lead multiple working groups to address systemic changes and develop solutions.

It is always our plan to get ahead of change. We want to help shape regulation, not just follow. We assess potential costs and where possible, mitigate this in land decisions, house type and site design. We also assess potential opportunities to positively differentiate and use change to our advantage. We collaborate with supply chain partners to optimize solutions and create opportunities for savings and efficiencies.

Regulation rarely stands still. So we see continuous business benefit and efficiency savings as business as usual. For example, we began discussing Future Home Standards back in 2019 when the first government consultation was launched. We set up a strategic focus group to develop our road map to zero carbon shortly afterwards. We then released our specification into the business in 2022 to meet the interim future home standard for energy ventilation and overheating alongside our net zero transition plan in the same year. We then launched industry-leading live site trials in Sudbury in 2023, putting us ahead of competition. With Future Home Standards set to be released later this year and effective in 2026, we are already well prepared to capitalize on opportunities and ensure efficient business operations.

So the areas I would like to talk you through today, we actively engage with government on consultations on regulatory and policy changes, addressing unintended consequences constructively to drive positive, practical and realistic change. Our ultimate goal is to provide more housing in line with government ambition and the country's needs. We focus on technology and design innovation to address challenges and seize opportunities for business improvement. This includes Future Homes Standard, modern methods of construction and innovative solutions for challenging sites. Improvements made at one site are rolled out as best practice across the rest of the business.

On supply chain readiness, our Supply Chain Director, Nick Wright, is here today, but I will touch on this briefly. Build efficiency is also crucial and depends on standardization across designs and operations, including house types. We are proud to be setting the pace for the sector, not just by responding to government consultations, but by actively shaping the agenda. Our net zero transition plan is now the benchmark for industry, and we have been instrumental in developing shared sustainability metrics that are simplifying and raising standards across the sector. Our technical innovation team leads the way in trialing and rolling out new construction methods and technologies.

This slide illustrates the unprecedented pace of regulatory change across the sector, and we are very well prepared. Related costs have been incorporated into our land procurement process for some time. We benefit from our work in standardization and from TW Logistics and TW Manufacturing and our industry-leading trials have been conducted to explore innovative new approaches. These milestones are all important. However, I won't run through all of this, but we'll pick out a couple to illustrate how we have prepared.

The building safety levy is expected to come into force in October 2026. Sites with building regulation applications registered before that date will have 3 years exemption from the levy. So most of these costs are not expected to arise before late 2029 into 2030. By 2030, updates to approved Document M, access to and the use of buildings are anticipated. With government likely to implement a higher standard of M42 to improve housing accessibility and adaptability, it is notable that 90% of our national house type portfolio already complies with this enhanced standard. So again, we are very well prepared in advance of change.

We are proactively advancing zero carbon ready homes. Our experience shows that transitioning from older energy regulations through 2021 LNF and into Future Homes Standard adds around GBP 10,000 per plot, which we have reflected in land acquisitions for some time. The more recent proposal from government for more PV panels would push this up slightly, albeit we await the final outcome of the future home standard consultation. About 5% of our completed homes are fully electric with many with air source heat pumps, and we're reducing the reliance on gas infrastructure to future-proof our projects.

Our innovation and trials put us ahead of the competitors and have given us the insight to influence policy and the confidence to plan for regulatory change. We have a strong evidence base to feed into government consultations, ensuring our voice is based on real-world delivery. We are very well prepared, having delivered the sector-leading first live site trials in 2023. Our technical teams have leveraged the insights and learnings from those trials to build knowledge. We have developed an understanding of the construction skills requirements for future homes and the trials have strengthened supply chain collaboration throughout the organization.

Homeowners were positive about the technology, especially the energy-efficient features. However, the mix of technologies can be overwhelming. So we've developed better ways to explain systems like heat pumps and smart energy setups. Energy savings were a major motivator with some bills dropping from GBP 230 to GBP 130 per month once the customers became more familiar with the technologies.

Customer feedback has been essential to informing our next steps and lessons learned and is something we will continue to prioritize as we progress. These trials have shaped our internal readiness and responses to government. The live site trial we did at Sudbury was highly regarded across the industry, and we received a number of external awards for this initiative, including Best Sustainability Initiative and most sustainable building project at industry awards in 2024.

Innovation is integral to our Future Homes Standard strategy, and we are industry-leading. We are developing 3 key solutions to enhance cost efficiency, sustainability and customer value. SmartPUC is an award-winning off-site manufactured utility covered, which we have co-developed with Smartroof. It relocates key mechanical appliances into the loft space, providing more sellable square footage, enhanced customer storage options and with revenue uplift exceeding marginal costs. This near cost-neutral solution complements our Future Homes Standard solution and will undergo further monitoring in late '25, early '26. And through our early collaboration, we have first-mover advantage on supplier volumes.

In-roof Air Source Heat Pump is a variation that some of you may have seen at Sudbury. This compact air source heat pump fits in the loft and addresses noise and vibration concerns. It simplifies installation, maintenance and replacement and is currently undergoing independent testing for scalability and market competitiveness. The Brick alternative is used with timber frame. This system reduces on-site skills demand, improves build speed compared to traditional methods and cuts embodied carbon by up to 50%. The solution developed with Mower addresses potential challenges posed by Future Homes Standard regarding increased wall depths for enhanced insulation. It enables us to preserve our existing planning consents while ensuring compliance with upcoming requirements. Early supplier engagement and on-site trials are now complete with the cost to be confirmed after detailed design reviews.

In addition, our industry-first heat network trial with our infrastructure partner, GTC, reduces maintenance and frees up internal space with RSL approval. It can integrate multiple low-carbon sources such as air source heat pump and energy from waste. It's competitively priced against plot-based air source heat pump solutions, and the system is already in use with 70 homes occupied in Sudbury and resident videos are underway currently. Our new ground source heat network site is getting underway in Scotland with completions expected in 2026. And we also have a number of other pipeline sites being planned with heat networks. These innovations reflect our leading role in the sector and our commitment to thoughtful R&D, focusing on long-term impact, operational feasibility and customer experience.

So taking a moment to step back, the pace of regulatory change in our sector has been unprecedented. Yet we have consistently anticipated and adapted ahead of the curve. Through early engagement, industry-leading trials and a commitment to innovation, we have not only prepared thoroughly for Future Homes Standard, but have also set the benchmark for others to follow. Our proactive approach, shaping policy, collaborating across the sector and embedding learnings from live trials means we are exceptionally well positioned to meet the challenges ahead.

Now turning to how we are mitigating cost pressures and how we drive efficiency through our supply chain to support our growth. By optimizing costs, we enhance financial performance through standardization and route-to-site efficiencies, leveraging Taylor Wimpey Manufacturing and Taylor Wimpey Logistics. Our innovation efforts are moving from start-up to scale up, targeting 30% timber frame usage by 2030 to deliver homes quickly and in volume. We see build time savings of 6 to 8 weeks.

We proactively manage risks to safeguard business continuity and regulatory compliance. Strengthening supplier relationships is key to supporting long-term collaboration and value delivery and by partnering, sorry, with KPMG, we have improved our risk management. Over the past 2 years, our procurement team has driven notable value improvements across regions and functions. Our centralized procurement function drives cost savings, enforces consistency and secure supply as we drive towards net zero in 2045.

It unlocks strategic value across the organization, applying data-driven decision-making to our buying. Leveraging Taylor Wimpey Logistics supports our site teams efficiently through ensuring just-in-time deliveries demonstrated with our excellent 98% on-time infill delivery, also by maintaining product quality and significantly reducing the administration burden while delivering savings scaling towards GBP 400 plus per plot. Strong supplier relationships are vital for long-term value and compliance remains a top priority.

Moving to standardization and build efficiency. All of these other boxes help set us up for an efficient build, starting with supply and boosted by standardization. We have 33 efficient standard house types that accounted for 94% of 2024 completions. This saves money using the consistent high-quality designs and also means that our subcontractors are familiar with our product range and designs, making it easier to get it right first time. We lead the volume housebuilders in terms of quality, and we continue to maintain high standards of build, increasingly deploying technology to aid our site managers. Subcontractors like working with Taylor Wimpey because they know we value safety, and we set up our sites for an efficient build.

For example, through TW Logistics, materials will be there for them when they arrive on site, meaning they have good visibility of their potential to earn with Taylor Wimpey. Overall, these examples give a sense of initiatives across the business focused on efficiency and everything that we do. They both save money, but just as importantly, they give us the capacity to scale our output as we grow for our outlets and volumes over the coming years in an efficient manner.

And just to wrap up, we've talked about Future Homes, which is a cost, but we've been factoring this in for some time. However, we also see it as an opportunity for our product to further differentiate new build from the secondhand market, but also differentiate from our competitors. We see demand continue to rise for energy-efficient homes and those built to new standards due to climate change awareness and energy costs. In recent customer research, 7 out of 10 people stated that they would be more likely to buy a home built to future home standard requirements.

Our Sudbury trial showed buyers increasingly valued reduced energy bills, comfort and sustainability viewing zero carbon-ready homes as a smart investment and lifestyle choice. We are using these learnings from our Future Homes trial and early adopters to support customers through this transition, so we are in a very good place. More widely, we continue to drive innovation to find the best solution for customers, and I've shown you examples of our successes today.

Driving cost and WIP efficiency through our supply chain is key and is underpinned by our focus on standardization to support our margin, but also for us to scale efficiently. We are well prepared to meet the challenges of future regulation and a proactive approach to engagement will help shape that regulation.

Thank you. I will pass over to Ian.

Thank you, Stephen. Good afternoon, everyone. My name is Ian Drummond, and I'm our Divisional Chair for our Scotland, Northeast and North Yorkshire businesses. Today, I will share a few slides exploring how we practically leverage our Taylor Wimpey brand to meet the needs of a wide breadth of customers. This strategy is working as demonstrated by our high level of market share and customer awareness, our reputation for quality and service and by achieving operational and delivery efficiencies, which maximize the opportunity provided by our high-quality landbank. I will bring this to life with some live examples from two of our developments in Scotland.

To start with a brief overview of the division for a little bit of orientation. It's a large area by geography, but our operating area is largely focused around the main population centers with particular focus on the central belt of Scotland, and in and around Newcastle, Sunderland and the Teesside Valley, to the South, we extend to Harrogate and to York itself.

Turning now to focus on our brand. When we first consider a new land opportunity, our management teams don't waste time debating which brand is appropriate for the location. Our starting point is that our Taylor Wimpey brand, supported by our well-earned reputation for quality, service, product and placemaking has the recognition and reputation to satisfy and meet all of our customers' needs.

On the left here, we can see the advantage that our strong single brand drives for the business. And on the right, we further optimize these in the division. Our most recent brand survey shows that Taylor Wimpey is one of the two most recognized housebuilding brands in the U.K. When we drill down further into that market survey, the results show that where our peers operate subsidiary brands, that is additional brands within the same company, these have markedly less recognition with customers, which makes it harder for them to build a reputation, which we know is a key customer consideration.

As you know, we successfully operate from our unified national brand. This is supported by our central marketing activity that promotes awareness. Within our regional businesses, we then drive customer consideration at a local level through our development-specific marketing, the quality of our product, our on-site presence, the knowledge and experience of our people and their interactions with our customers. Our business also builds on the reputation of our brand through our proactive community and stakeholder engagement activity, which is undertaken across all of our operational areas.

From the outset, we factor in allocations of local demographics into land purchase decisions to better understand who our customer is. This enables us to determine product mix, select an appropriate specification level and make design decisions using our versatile and standard house type range. These house types have been designed to standardize and simplify our product range to cover all of our target customers from first-time buyers to second and third steppers and downsizers as I will go on to show.

The vast majority of our developments are built out as a single outlet, where I would expect to achieve, on average, a private sales rate of 0.8% However, we also consider adopting a dual outlet strategy where it is clear that the local market has the capacity to absorb an increased volume of completions, and we are satisfied that there is scope for genuine market differentiation. Where we do operate a dual outlet approach, this would typically be defined by product size and price point, elevational treatments or specification and where there is an opportunity to design distinct character areas as part of a larger development. We only use dual outlets where there is a compelling reason to do so and where it is beneficial from a sales perspective and supports the enhancement of key financial metrics. I would expect any dual outlet site to be able to support a minimum combined private sales rate of 1.4%.

In our slides, Jennie outlined some of the benefits of single brand efficiency, and we do see these playing out in the division. The success of this approach is evident in our high market share across our divisional operating area, where we are achieving a high sales rate compared to peers operating two brands on their developments. For Taylor Wimpey, this means delivering greater volume from fewer outlets without having to replicate marketing design, sales and production costs, which leads to real savings.

For example, fixed opening costs for a new outlet are in the region of GBP 250,000 with annualized running costs of around GBP 800,000 per annum. This is before consideration is given to the duplication of centralized costs for brand establishment and ongoing marketing support or for the development of a new product range to meet the needs of a different market segment, amongst other things. And although our output volumes per outlet are higher than peers, we are a leader in construction quality review scores with a low number of reportable items per NHBC visit, and we have customer service scores that we are rightly proud of.

To support our view on brand, I pulled out a couple of data points on the slide to highlight what we've achieved. For example, across our Scottish Central Belt operating area, our market share for the 12-month period up to the end of June '25 by net private sale was around 16% and our divisional half year sales rate was 0.8%, which was sector-leading. I mentioned earlier that the Taylor Wimpey brand enjoys a positive level of customer awareness. And last year's HBF survey, over 97% of customers from across our division were happy to recommend to a friend, and 96% would be prepared to buy again from us. This is also seen in our customer profile where around 30% of sales have been to customers who have bought previously from us.

In terms of quality, our divisional CQR score is 5.15. I'm conscious that I've covered a lot on this slide, but my key takeaways for you here are Taylor Wimpey is a recognized and trusted brand, and we capitalize on this effectively at a local level. We make a significant tangible site saving from operating one efficient and consistent brand across all of our live selling outlets. And our sales, customer and quality metrics underpin our confidence that this is the right approach. We've talked about how our brand can be extended across a broad range of buyer types and how our product can be adapted to meet the requirements of customers in the locations where we are currently building or looking to invest in new land.

On this slide, I've shown some examples of the entry, mid and upper end of our product offering. These are just 3 of our house types from our standard range of 33 homes spanning from 1-bedroom apartments to 5 and 6 bedrooms. So it's just to give you a flavor. The strength of the Taylor Wimpey brand is probably most evident if we look at our price points. And although there are regional differences across our division, our price spread on private sales in 2024 was from GBP 151,000 to GBP 722,000, illustrating our depth of market coverage as well as a reminder of the critical importance of selecting the right product mix to satisfy the site's location and our target market.

Finally, but of real importance is that consistency and control of our house type selection is really important to our subcontract and supply chain, ensuring we maximize our procurement and build efficiency by minimizing product and material variations. The familiarity and repeatability of our house types and construction details help make it easier for our teams to focus on the quality of our build, an essential component of promoting our brand.

Moving on to the next slide. What I'd like you to see here is that while our house type range provides a platform to ensure simplification of build and standardization of technical detailing, we still have the ability to select from a wide range of home sizes and designs with an internal layout configuration that can suit all of our customers' preferred living styles. Open plan versus traditional rooms has always been a debate, so we've settled it by offering both.

The example of the Rightford house type also illustrates how we can elevate our house types in a location-specific external finish, enabling us to satisfy local planning requirements and create interesting places with curbside appeal and character. Alongside external treatments, we also determine our internal specification level to align with market and customer expectations, but that still provides the opportunity for our customers to personalize their homes through option choices. I picked out two case studies that I think help bring our brand and product selection to life.

As I mentioned earlier, most of our sites operate from a single outlet with our product choices carefully considered to meet the demands of the local market. Our West Craig site in Maybury, West Edinburgh is an excellent example of this. It was a strategically sourced site of 250 new homes in a location we would classify using our quality matrix as A, B. West Craigs is a site towards the upper end of our target market, but the product range is still quite wide, where the price point has sat between GBP 250,000 to GBP 725,000, demonstrating our confidence in the Taylor Wimpey brand and our product range to meet the needs of customers to deliver a consistently high sales rate and to support excellent financial returns.

At West Craigs, our larger product is attractive to families moving outwards from Central Edinburgh, offering great value for money for a family home within a much sought after Edinburgh post code. And with our smaller product, our research identified that there was a real opportunity to appeal to potential first-time buyers and to those downsizing or rejoining the property market. We selected house types to encourage buyer appeal across the catchment area. West Craigs has been a very successful site with a current year-to-date sales rate of 1 per week. Inclusive of 7 affordable homes, we will complete 55 homes on West Craigs this year. Our customer surveys show very strong brand awareness and excellent word of mouth as being a factor influencing buyer choice. We have a very positive 5-star customer score as well as a very high build quality.

Our service is often cited in our customer surveys as a reason for choosing us. We also know from these surveys that many friends and families of our West Craigs customers have purchased on the same development or another nearby Taylor Wimpey developments and are happy to recommend us. Dual outlets can be deployed when offering product of different size and price point, a variation design styles and specification or where each outlet can be located in a different character area of the site. This enables a tailored and targeted approach to be taken to our dynamics-based marketing whilst leveraging customer awareness of brand to reassure them on what our research shows that customers value, quality and service.

A good example is on our current phase of Dargavel, Bishopton just outside Glasgow. This is a long-standing Taylor Wimpey site where we were the first active developer in 2013 and have now successfully completed over 800 new homes. Bishopton is a super large site and a brownfield regeneration scheme. It has outlined planning consent for 4,000 homes alongside a number of supporting new local facilities. This is one of the largest community growth areas in Scotland. On the current phase of this site, we have utilized two of the master plans character areas to deliver differentiated product mixes to the market.

Dargavel Village comprises smaller house types at price points ranging from GBP 230,000 to GBP 440,000 and Dargavel View offers larger homes from GBP 465,000 to GBP 685,000. Both outlets are sold under our unified single brand. As we've been in Dargavel for some time, we have seen a significant number of customers buy from us again. In fact, nearly 40% of our current fees are repeat purchasers with some now buying for the second and third time. These are individuals that may have bought a starter home using Help to Buy and have progressed up the ladder to the purchase of a 5-bedroom home for over GBP 600,000, an excellent vote of confidence in the quality and service we are delivering alongside the attraction of the place being created. Of course, we have naturally focused on the customer dimension, but the values our Taylor Wimpey brand stands for are also very important to our relationships with our stakeholders and land vendors.

At Bishopton, we have an excellent relationship with the landowner, BAE Systems forged over more than 12 years of involvement at Dargavel. We are the only developer to have had a continued presence on this site and are proud that we will have been part of the Dargavel story from start to finish, albeit we have a few years to go yet.

So to summarize my section before handing over to Chris. The case studies are focused on Scotland, but we can see from the division as a whole that our brand approach really works. We have a highly recognizable and trusted brand that demonstrably reaches across a broad spread of customer demographics. This is supported by a standard house type range that can be flexible and capable of serving the whole price and size range of our target markets.

Our disciplined approach to standardization and simplification of our house type range delivers economies of scale, benefits our supply chain and subcontract partners and their desire to work with us, ensuring they play a key role in supporting our commitment to quality and service. Proof points are our high market share, high sales rate and a very high level of repeat customers. We have the ability to selectively use dual outlets to leverage our single brand where there is sufficient demand in the market and where we can offer homes suitable for different market segments.

Thank you for listening, and I will now hand over to Chris.

Thanks, Ian, and good afternoon, everyone. So Jennie opened today's presentation by setting out medium-term targets. Everything you've heard so far today should have given you a clearer sense of how we intend to deliver those targets operationally. In the next section, I'll look at how our operational plans translate into financial outcomes and highlight the key factors driving Taylor Wimpey's progress from where we are today to where we want to be in the medium term.

And just to be clear on the time frame, we think about the medium term as 3 to 5 years, as we said earlier, from 2025, consistent with our previous commentary around the outlook for the business when we talked about setting up the business for growth from 2025. However, given our last published numbers are for 2024, it's appropriate to use these as the base comparator in this section. The targets on this slide have been carefully considered. They reflect the current market conditions as well as the continuation of the positive signs that we are seeing with planning, which will continue to be a key enabler for delivering our strategy.

While the environment remains dynamic, not least as we approach the budget, those of you familiar with Taylor Wimpey's track record will recognize that given our current position and operational strength, these targets are both realistic and achievable. Delivering against these targets will create meaningful value, both for our customers through the provision of much needed new homes and for our shareholders through enhanced returns and continued distributions under our capital allocation policy.

And I'll now take you through how we intend to achieve these targets, starting with margin. So this chart outlines the key drivers of our expected progression from the current underlying group operating margin to our medium-term target of 16% to 18%. Three key factors underpin this. Firstly, our volume growth. As we deliver higher volumes, we'll benefit from improved operating leverage, allowing us to spread our fixed costs more efficiently and enhance margin. Second, our landbank evolution, transitioning from older, lower-margin land to newer, higher-margin sites, supported by disciplined land acquisition is expected to be a significant driver of the targeted improvement in margin, particularly from 2027, as I will show in a second.

And third, regulatory change. While the upcoming requirements like the Future Homes Standard and building safety levy will have some impact, we have, of course, been proactively pricing these costs into our land purchases for some time. Sites purchased before these costs were known will experience some margin pressure, but this has already been accounted for in our planning. Taken together, these factors support a credible path to achieving our 16% to 18% margin target. We've also included house price inflation and build cost inflation in the bridge to illustrate their potential influence on margin in the medium term.

Starting from the end of 2024, the bridge reflects the small headwinds reported in half 1 this year. From this point, we expect broadly neutral effect, consistent with a normalized market where house price inflation and build cost inflation offset one another. While the combined impact of these factors has been negative over the past few years, we believe that assuming a neutral effect going forward is both reasonable and prudent, especially in the light of the latest expectations around falling interest rates and recent wage inflation.

Let me now take you through the first two drivers on the chart in more detail. So as Jennie outlined earlier, our plan to drive volume growth is underpinned by increasing outlet numbers from a similarly sized or even slightly reduced land bank. This will be achieved by efficiently progressing our existing outlet and planning pipelines and by continuing to reinvest in smaller sites. Our medium-term volume target of 14,000 homes represents an increase of over 30% from the midpoint of this year's guidance range or a compound annual growth rate of between 6% and 10%.

The pace at which we reach this target will no doubt be nonlinear and depend on the prevailing planning and affordability environment, but we are confident in its achievability. To put this in context, we have retained the operational capacity and geographical reach to support this growth from our existing structure of 22 business units. For example, in 2019, we delivered 15,500 U.K. completions from 24 business units. So we're confident in our ability to scale within our current footprint. In fact, as shown in the upper chart, we expect the average output per business unit to remain below 2019 levels.

Today, we operate with a fixed cost base of approximately GBP 350 million across our U.K. and Spanish businesses with close to 30% flowing through gross margin. As volumes increase, we expect only a modest rise in fixed costs, enabling margin progression through increased efficiency. While my earlier rule of thumb of 10 basis points operating margin uplift per 100 completions was relevant at lower volumes, the effect naturally tapers as scale increases given the diminishing impact of fixed cost absorption.

In the short term, the late November budget may introduce some uncertainty into the autumn selling season and could affect the strength of the order book we take into 2006 (sic) [ 2026 ] and therefore, next year's volumes, and we have been prudent in our planning in this regard. However, importantly, we believe the target can be achieved without relying on a meaningful improvement in effective demand.

So the key takeaway is that while short-term uncertainty may well mean U.K. volume growth in 2026 is below the straight-line run rate required to reach our medium-term target, that is already reflected in our thinking. The evolution of our landbank is a key driver of the margin improvement we expect, and we want to help you understand how this will play out over time. The chart shows how the mix of annual completions is expected to shift across different vintages of land over the coming years. Older land, particularly that acquired before 2023, has been impacted by elevated build cost inflation.

In contrast, new land entering the landbank is coming in at higher margins. If it takes, for example, 4 years to reach our volume target, then by that point, over half our completions would be coming from newer, higher-margin land. The actual margin benefit we realize from this shift again depends on several factors, the pace of volume growth, the intake margin on new land acquired and other market influences such as future house price inflation, build cost inflation and any further regulatory changes.

It's important to recognize that this evolution will take time to flow through. The progressive contribution from new land, shown in the blue segment in the chart illustrates that the margin uplift from land evolution won't be linear. So just to be clear, a large proportion of our completions over the next couple of years will still come from land acquired before 2023. And because there's limited margin differentiation between those 3 earlier vintages of land, the margin uplift in 2026 will not be as large as in later years. It will be more meaningful in 2027. And then it's really in 2028 and 2029 where the lion's share of the margin improvement is delivered.

So let me now turn to how margin improvement, combined with the actions that we're taking to accelerate asset turn, supports our ambition to increase return on net operating assets. So starting with land, as Jennie mentioned earlier, we currently hold more land than is efficient for today's output levels. We expect the NPPF to improve land supply and reduce the need to hold as much land as we would in a more constrained environment.

Our medium-term land bank target of 4.5 to 5 years based on 14,000 completions implies a short-term land bank of around 63,000 to 70,000 plots by the end of the period, down from just under 76,000 plots held in June this year. While this represents a reduction in land bank size, it doesn't all translate into a reduction in land investment. And that's because smaller sites typically carry a higher average cost per plot, largely due to differing infrastructure requirements. And we also anticipate a gradual shift in our geographical mix moving from south to the north, which will help balance the cost profile and partly offset the higher per plot costs of smaller sites.

Turning to work in progress. I'd like to provide more clarity on the factors behind the elevated WIP per outlet we saw at the half year and why we expect this to reduce over time. As of June, we held approximately GBP 270 million of WIP across 9 Greater London apartment schemes. These are expected to complete gradually over the coming years, with full release of that WIP anticipated by 2029. Given the planning and viability challenges in London, alongside constraints associated with the building safety regulator, we have limited appetite to reinvest that capital back into the city. In addition, our current site mix includes a higher proportion of developments with above-average infrastructure requirements. As this normalizes in the way illustrated by Shaun earlier, we expect to recover a further GBP 100 million.

Finally, as our mix continues to shift towards smaller sites, we anticipate further reductions in exposure to high infrastructure schemes. Taken together, we expect this deliberate change in mix to allow the recovery and redeployment of our existing WIP to support approximately 40 additional outlets on standard housing sites over the course of the plan. So the combination of a leaner land bank and lower WIP per outlet along with higher volumes will materially improve our asset turn, driving improved capital efficiency and helping us deliver on our medium-term target of at least 20% return on net operating assets.

Looking at everything I've covered so far through a cash lens, this chart illustrates the level of cash we expect the business to generate over the medium term and how we intend to deploy it. As you know, Taylor Wimpey is a consistently cash-generative business. With no need to increase land investment, only modest WIP investment and improvements in WIP per output, as mentioned earlier, we have enough cash to fund the ordinary dividend and still generate surplus capital. This is after accounting for the settlement of the cladding provision and our ongoing tax and interest obligations.

And all of this is achievable while maintaining low adjusted gearing. We're often asked what low gearing means in practice, but for us, this isn't a fixed definition as it's important to preserve flexibility for land investment when market conditions are favorable. For example, and as a bit of context for you, at the half year, we described our adjusted gearing of 5% as very low. Similarly, in periods such as June 2016 when gearing was 20%, we again considered that a comfortable level for a business like ours that generates significant cash flow.

Importantly, we don't view gearing in isolation. Our view as to the appropriate level reflects investment decisions made in the context of the market outlook and the strategic priorities at the time. So in the short term, you are likely to see adjusted gearing increase due to the timing of the normalization of our WIP investment, but we remain committed to maintaining a strong balance sheet and a disciplined approach to capital allocation.

So this slide will look very familiar to you because our capital allocation priorities, again, remain unchanged. First, maintaining a strong balance sheet is a must and underpins everything we do. Second, as you've heard me talk about a number of times in this presentation, we will invest in land and WIP at the right point in the cycle to drive future growth and maximize shareholder value. Third, given what you've outlined today, you'll see why we remain comfortable with our capital allocation policy and intend to continue to pay our ordinary dividend, returning 7.5% of net assets to shareholders through the cycle. Finally, where we have excess cash, we return it to shareholders. We've done that consistently and will do so again at the right point in the cycle.

So in summary, our medium-term targets are grounded in operational reality and supported by a clear delivery plan. Margin growth through the period will be driven by volume growth, land bank evolution and disciplined cost management, stepping up particularly from 2027 and with a clear path to our 16% to 18% target. We're focused on improving capital efficiency, which will support our ambition to deliver at least 20% return on net operating assets. Strong cash generation underpins our ability to invest, maintain a robust balance sheet and continue delivering attractive shareholder returns. Our capital allocation priorities remain unchanged, and we remain committed to executing them with discipline and consistency.

And I'll now hand back to Jennie for a summary of the afternoon.

So thank you to Chris, Ian and Stephen. So thank you for joining us this afternoon. We are at the beginning of a new cycle with significant opportunity ahead, and we've taken early proactive steps to ensure that Taylor Wimpey is well positioned to capitalize on it. There is demand in the market, and we have the land, the capability and the resources to deliver a growing number of much needed new homes. Our strategy focuses on unlocking value from our existing land bank, increasing outlet numbers and volumes and driving operational leverage, key levers that will support volume growth and margin recovery.

Importantly, the combination of a leaner land bank and lower work in progress per outlet will enhance our capital efficiency. This underpins our confidence in delivering our medium-term guidance of at least 20% of return on net operating assets. As our strategy gains momentum, we expect not only a recovery in margins, but also robust cash generation. So we will continue investing in the business while maintaining our capital return policy, providing compelling returns for our shareholders over the medium term.

And with that, I'll now open up for questions.

Carlos Caburrasi from Kepler. I was wondering if you could provide some visibility on the dynamics you're currently seeing on the labor market? And what are your expectations during this new cycle? And second, going to fire safety provisions. I mean, this can take a big bite on cash during the period. And I was wondering if you could update us on the movements you've seen since H1 on your expectations for the medium term.

Okay. I'll take the labor market. Chris, if you want to sort of take the cash question. At this point in time, we're not seeing sort of any great constraint within the supply chain. We are fairly comfortable with the labor availability. But as we look into the medium term, we know that there will be challenges, both for Taylor Wimpey and across the sector as volumes grow. We talked about what we've been doing within Taylor Wimpey around sort of our investment in our own people and our ability to attract good people through the cycle. And I'm very confident that I think that we are an excellent employer, and we have an excellent story and our employment -- or employee value proposition now gives us sort of the language and the coherence to put that forward.

We're also very actively involved around apprentices and early entry. I sit as a Board member of the Construction Skills Mission Board, which is a cross-department government lead to ensure that we have the apprentices and the skills that the wider construction sector needs. But at this point in time, I think that we are in a good place but there will be challenges ahead. That's why we've been investing in Taylor Wimpey manufacturing for timber frame, why we've been investing further in Taylor Wimpey logistics, and as I say, also in our early entry.

So Chris, on cash?

Yes. Absolutely no change from the half year, either in terms of the provision or in terms of the cash unwind. So we said GBP 100 million for this year, including a chunk for the building safety fund within that, a little bit more next year and then tapering down over the medium term.

Will Jones from Rothschild & Co Redburn. A couple, please. First, just on the completions profile by land acquisition period. I see you've split the pre-2023 period into 3 phases. How should we think about the difference in the margin between those 3? Presumably the '20 to '22 periods maybe got the lowest, perhaps. And then just on the cash profile, just to confirm on the slide you've given, do we read that as essentially you expect the net cash will end the medium-term period slightly higher than it is at the end of, say, '25?

And then just on route, I appreciate you've given an adjusted gearing commentary, but do you envisage the net cash balance at year-end is kind of neutral at any point on route or maybe even slightly net debt? Just the net cash on route, if it is going to end slightly higher in, say, 3 to 5 years, how much does it dip down in the meantime, if at all?

I think that's for me. So yes, I mean, on the land bank evolution vintages, actually, the -- and I think I said this, the distinction in the margin across the earlier vintages is actually pretty small. It's when you get to 2023 and beyond, that's where the kick up. Now you'll have heard me in the past talk about that particularly good period straight after Brexit. And that's in the context of actually describing really quite fine movements in land bank evolution in the margin bridge in specific reporting periods because that has been true, but we're talking about a bigger shift here, yes. So that's that.

In terms of the cash profile, and yes, I mean, you can see from that, that we would expect there to be a surplus over the medium term. So depending on what you do with that surplus and what the market outlook is at that point in time, does it drop into cash? Well, yes, it could do. But usually, we -- if we've got excess cash, then we would return it to shareholders. If there's opportunity then to invest that cash to grow at a faster pace at that point, then -- so there's multiple options for that. And yes, over the period, I think we would expect to remain in net cash at year-end. I think that's what you're asking.

Chris Millington at Deutsche Numis. I just want to explore a little bit about this linear profile, which you said it's not going to be linear. What -- how fast do you think you could grow in a year from a volume perspective? Some of your peers have talked about 5% to 7% before it kind of gets a little bit difficult to manage. And I suppose at the other book end of that, what's the danger volumes could go backwards next year and potentially margins as well? That's number one.

Next one, I just wanted to ask about this move to smaller sites. Usually, we see a correlation of faster sales rates with larger sites because of the natural absorption rate of the area. It seems like you're assuming your sales rate stays around 0.8% from some of the comments around the outlets. Do you think there's a risk that the smaller outlets do lend themselves to a slower sales rate like your peers? And the last one, it was just about land bank margins. Can you comment on where you think you are today and what your intake is? Because clearly, that's a key component behind the margin move.

Okay. I'll talk to the first 2 and then, Chris, if you would pick up the land bank margin point. In terms of growth, we have sort of talked about the constraints and opportunities on growth. And I think that you'll see in terms of the CAGR, somewhere between 6% and 10%. Shaun in his presentation talked about his divisional volumes increasing 10% this year. So there is opportunity for us to grow. We talked about the discipline that we have in the business. And I do see them as building blocks, Chris.

So when we talk about our standardization and the fact that 94% of our homes are built to our standard house type range, the use of Taylor Wimpey Logistics, the use of Taylor Wimpey Manufacturing, all of those building blocks are set in place to help us in that growth phase. And we've been working really hard, as you know, on customer service and satisfaction and build quality. I think all of those things are about controlling your business as you look to grow and then there's the opportunity potentially within the market. So it's not without its challenges, but I think that we do have a really strong operational platform in order to sort of embrace growth.

I'm not going to get drawn into sort of guidance for 2026. We'll do that. Yes, we'll do that at the normal time sort of in February. And we obviously have to see how the autumn selling season goes, what that does to order book and then obviously see what the spring selling season looks like. But in terms of smaller sites and sales rates, I think you gave yourself your own answer because you talked about location. And I've been here telling you that we're really careful about the locations that we invest in.

Some of the sales rate -- or constraints on small sites isn't really sales rate. It can be build rate. So if we assume that there's a really strong effect of demand, it's our ability to build to that. And that is where Taylor Wimpey Logistics helps us because on small sites, you can get yourself tangled up fairly quickly around your build arena and your ability to deliver that safely. And Taylor Wimpey helps us ensure that we've got relatively small compound areas and that we have a much more sort of controllable build environment.

So I don't agree that a small site by definition, has a smaller sales rate, but I do agree that we have to ensure that we've got our logistics to deliver that site set up accurately. We also don't need all sites to be selling at very high rates. It's a mix across our broad portfolio. So I see that there's a range of push and pull factors, but I'm comfortable with the assumptions that we have made, and we have built sites that are selling at good rates that are small. and sort of proves that for us.

And then the land bank, Chris, over to you.

Yes. Chris, we haven't previously disclosed the margin in our land bank. We do provide the land cost as a percentage of average home price in the short-term land bank that Jennie referred to earlier as 13.3% at the end of half 1. But to try to be as helpful as I possibly can be just this one time, I don't mean that about the helpful. I just mean this. The gross margin in the short-term owned land bank is approximately 20% to 21%. And that's higher than we expect to deliver through the income statement in 2025 or 2026.

And there are 2 reasons for that. Firstly, the larger sites within each of those land intake vintages have higher margins. So as the smaller sites drop away, then the larger sites remain and the particular -- the margin from a particular vintage increases. And then secondly, when you consider that latest vintage, the ones bought since 2023, then obviously, there is a lag between purchase and getting a full year of output from those. So yes, 20% to 21%, but it doesn't immediately roll out like that.

Aynsley Lammin from Investec. Just coming back to the capital allocation policy. Just interested to hear your thoughts around kind of obviously, a strong commitment to that policy reaffirmed today. Is it you're looking at the stock market and kind of appeal into a cohort of investors, income funds? Or do you believe that actually it benefits the group operationally, provides a bit more discipline, no crazy M&A, all the things that lots of housebuilders introduce these dividend policies for post-GFC. Just interested to hear your views on why you've committed so strongly to it.

And then second question related, did you consider flexing it a bit in terms of capital returns being share buybacks has been able to be substituting the dividend? Interested to hear your thoughts there.

So our top 2 capital allocation priorities are obviously maintaining a strong balance sheet and investing in land and WIP to drive growth. And should constraints arise in either of those, then they would take priority over dividend payments. At this time, we are not facing, and you can see that very clearly in what we've presented today, constraints in either of those. So it's certainly not the input. It is the output.

And then, yes, on buyback, we have an ordinary dividend policy, which is -- it's very clear and well understood. It's been consistently applied, and it is very consistently welcomed by our shareholders. And yes, we also have a policy that allows for the return of excess cash. We don't have excess cash at the moment. But when we do in the future, then that will be returned either via specials or buybacks dependent on what is most appropriate at that point in time.

Ami Galla from Citi. Two questions from me. The first one was on Future Homes Standard within the sort of medium-term plan, when do you budget the actual application in terms of volumes for those standards? And also in your embedded calculations, do you factor in any remuneration for the higher spec that you are accommodating with those regulatory changes, i.e., do you expect customers to pay up for that?

And the second question I had was really in terms of the margin and the sort of progression that you are setting out here. When we think about the current market conditions, there is a relatively high level of sales incentives that we are operating with. As we think about the next 5 years, are you assuming that this is the new norm? Or do we expect that to kind of narrow over the years?

Okay. So on the first question, I think really what you're asking me is the 20% to 21% that I've mentioned is embedded, does that capture the Future Homes Standard costs? Yes.

I think it's both the cost as well as the sales price that we are assuming, i.e., do we expect a higher spec for it?

We have not assumed that there will be some sort of Future Homes Standard premium in any of what -- but we have assumed what is certain, which is the cost. And then in terms of margin progression and sales incentives, we said really very clearly that the sales rate that we're assuming is broadly consistent with the last couple of years. So last year's sales rate full year, 0.75. This year, year-to-date, 0.74. So we're probably going to end somewhere around the same, broadly consistent with that. And we're not assuming any recovery. So no change in the sort of underlying state of the market that you've seen in recent times. So we have not gone through the model and adjusted incentives specifically, no.

Alastair Stewart from Progressive again. A couple of questions. First for Ian. In Slide 42, you said that the private market share in Scotland was 16% and the division's H1 sales rate was 0.8. Is there any variation in those 2 between Scotland Northeast and North Yorkshire, both for the market share and the sales rate? That's the first question. And then the second probably for Jennie. I've not heard any mention of new towns, which were announced over the weekend. Any thoughts on those?

Okay. Well, I'll take the new towns question and then pass over to Ian. I mean, I think the first thing that I would say is new towns are considered additionality. So they're over and above all of the other housing needs that we have discussed both here and previously. So those 300,000 to sort of 370,000 homes depending on what you assume exclude new towns. So the view is that they will follow through in later plans. I mean quite a mix of opportunity. You'll see some fairly high-density sort of new towns in existing urban areas, Thamesmead out there in southeast London, South Leeds and Manchester. They're not likely to be opportunities that are attractive to Taylor Wimpey. But one of the opportunities in North Milton Keynes is an area that we have significant strategic land control and that we have been actively promoting. So it's pleasing to see that emerging.

We, as both a buyer of land, a deliverer of homes, will be very interested in how the new towns sort of develops. But we've got one certainly that's an opportunity within our land bank at the moment. And then Ian, on your market share.

Yes. So the 16% private net sales figure that was on the slide. So that's provided by independently from Rettie & Co, one of our research advisers, and that is a figure based on the operating area of our Western East Scotland business is defined by the authorities that they are currently active in. And that was for the period -- the 12-month period leading up to June '25. And then I think you asked just about sales rate accrual.

Just before that, you obviously got independent research, but have you got any idea of roughly what the percentage is for Northeast and North Yorkshire? Is it lower than that number?

I've got that just by output. And I think we think in our Northeast North Yorkshire business, our market share by volume is around 6% to 6.5%.

6% to 7%.

And then the sales rate, how does that differ between, well, Scotland and the rest, basically?

It's broadly consistent across the division.

Yes. We don't want to get into too much segmentation, Alastair.

It's just my Scottish route.

Charlie Campbell at Stifel. Just a couple from me. You talked about increasing the land creditor position, but I just wonder how that squares with buying smaller sites where you would have thought from first principles may be harder to defer?

Yes. So yes, I mean, the land creditor position as a percentage of sort of gross land is quite low at the moment. And what we've seen in the market more recently as I think the land market has perhaps eased a little bit is that, that is one of the areas where we are seeing easing and there is more scope for deferred terms. And Jennie, I think, was very clear. This isn't a wholesale shift. We will still buy large sites. We will still buy medium sites. It's quite a subtle sort of emphasis to make sure that we are optimizing the number of outlets that we drive from what is a considerable investment in land.

And the second one, just you talked in the presentation about Future Homes Standard about the Mauer cladding system. As I understand it, it seems to be at least the 4 biggest housebuilders are trialing this and maybe more. What sort of capacity does Mauer have to satisfy demand if people do decide to adopt it?

Stephen?

Yes, there has been some collaboration with bringing this product forward given how innovative it is in its form. So we've been working with Mauer for some time bringing that forward. They are making investments in their capacity and in their own infrastructure to support the rollout of this. So I probably can't give you a figure just now, I'm afraid. But just to confirm that they are investing into their factory and their manufacturing capacity to be able to deliver.

Yes. I'd just sort of add to that. What we've achieved with our early investment with a few other housebuilders is first-mover advantage, favored nation status in terms of supply. And also if the trials prove the method and the opportunity to self-manufacture.

Sam Cullen from Peel Hunt again. Just got a follow-up really related to, I think, Jennie, your comments on labor constraints going forward, and I take the point around the subtlety around the shift to smaller sites. But if we think about operational capacity and stress in the business probably on a net basis increasing going forward with more smaller sites, more complex things to manage, how does that change or not your appetite to employ more labor directly going forward?

So I mean, in terms of direct labor, our models have some geographical differences. So for example, Ian in Scotland, operating over a tighter geographical area across the Central Belt has a higher proportion of direct labor, whereas I think the further south, Shaun will see less of it in his division. So there's a real sort of geographical dimension as to how sort of direct labor as a model works, Sam, no matter what the economic climate and the sort of the stress and strain is on the supply chain.

I mean, look, there's a number of things that we've given today, and I go back to that, it's a layering up of sort of incremental elements. The fact that -- and I think it was Ian that mentioned it, but I think that Shaun and the other DCs would agree, we spend a lot of time being thoughtful about how we can ensure that our subcontractors earn well, are safe, have supply of materials so that they can deliver efficiently, that our payment practices are positive to the supply chain. Through all of our growth plans, twice a year annually, we'll engage with our subcontractors to ensure that they understand our plans. And we invest in our supply chain and subcontractor base and support them through hybrid apprentice models and investing in their people as well.

So I think that a greater number of sites will sort of obviously require a certain level of additional overhead. I think Chris already mentioned, it's only -- it's a relatively small level of overhead versus our existing framework. And that is something as part of our preparation for growth that we have been investing in across the business.

Okay. Well, thank you very much for your time and attention this afternoon. It's been great to see you all here. I hope that you will join us for some drinks and some informal chat. And Chris and I will then see you more formally or at least speak to you more formally at the November trading update. Thank you all for coming.