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Taylor Wimpey Shares Are Up 24% Since October. What’s Next?

Simon Mugo trader
Updated 21 Dec 2022

The Taylor Wimpey plc (LON: TW) share price has risen 24.1% since bottoming in October, and many are wondering whether the recent rally can extend into next year. As a homebuilder, Taylor Wimpey faces an uncertain future as we head into the new year.

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YOUR CAPITAL IS AT RISK. 81% OF RETAIL CFD ACCOUNTS LOSE MONEY.


The company recently reported that the number of cancellations had risen as potential homebuyers delayed their decision to buy new homes, given the high mortgage rates and the looming recession that could affect their incomes.

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YOUR CAPITAL IS AT RISK. 68% OF RETAIL CFD ACCOUNTS LOSE MONEY

As a result, many homebuyers are adopting a wait-and-see attitude, which has affected Taylor Wimpey’s closed sales and new home orders. However, the UK property market is not homogenous, and there are some areas where average house prices are rising. 

For example, house prices in the North East have been rising despite the property markets slowing down. Furthermore, real estate analysts are not expecting house prices to crash but to fall slightly and stabilise at lower levels. 

Additionally, the Bank of England is expected to slow down its rate hikes next year as inflation in the UK peaks and starts to fall. Therefore, mortgage rates will not rise significantly from here onwards and may start declining towards the end of 2023. 

Taylor Wimpey is also popular among income investors due to its 8.8% dividend yield. However, the current market environment may force the company to cut its dividend if demand for new houses remains low next year. 

Still, the company remains a crucial player in the UK housebuilding industry. It is set to benefit from any improvements in the housing sector, including a surge in house prices or a decline in mortgage rates that could drive more people to buy new homes. 

Looking at the Taylor Wimpey share price chart below, we can see that TW shares have recently broken out of a sideways trading range to the downside. The shares seem ready to fall back, so now is not the best time to buy them. 

However, investors can buy TW shares once they reverse course and head higher.

*This is not investment advice. 

Taylor Wimpey share price.

The Taylor Wimpey share price has risen 24.1% from its October low of 81.05p to its current price of 100.58p.


YOUR CAPITAL IS AT RISK. 81% OF RETAIL CFD ACCOUNTS LOSE MONEY.


Simon has over six years of professional trading experience across FX, commodities and equities. He has a strong passion for financial markets and is particularly focused on price action trading