Taylor Wimpey has said it expects to build close to the upper end of its target of new home completions this year despite a steep slide in profits in the first six months of 2024.

The UK's second-biggest housebuilder also welcomed Labour's proposals to shake up the planning system which the industry has consistently blamed for getting in the way of meeting construction goals. Taylor Wimpey said the reforms set out on Tuesday by Deputy Prime Minister Angela Rayner are an "important early step" to meeting the Labour party's target of building 1.5 million new homes during this parliament to combat the UK's housing shortage.

“Though we expect changes to take some time to impact, we see the planning reforms outlined by the new government as key to unlocking future years land supply and the investment in skills and resources necessary to support future housing need," the company said.

READ MORE: Profits still plunging but not all's gloomy at Taylor Wimpey

While the housing market remained relatively stable in the first half of the year, Taylor Wimpey noted that mortgage costs were still higher than in recent years. This is continuing to affect affordability for some customers, particularly first-time buyers.

The industry has been betting on a near-term recovery in the sector amid easing mortgage rates and greater competition among lenders. This has bee driven by expectations that the Bank of England will soon begin cutting the benchmark rate which currently stands at 5.25%.

The Bank's Monetary Policy Committee (MPC) is due to announce its latest decision on interest rates today.

Taylor Wimpey posted a pre-tax profit of just £99.7 million for the six months to the end of June, down 58% from £237.7m in the same period a year earlier. Revenues also fell substantially, down more than 7% at £1.52 billion.

New home completions were 8.4% lower at 4,654 and average selling prices also slipped lower. The result was also flattered by increased profits from land sales.

That said, the figures were still better than analysts had expected.

READ MORE: Taylor Wimpey profits plunge as new home completions tumble

“Interest rates remaining higher for longer inevitably has an impact on housebuilders, and that is plain to see in Taylor Wimpey’s performance compared to 2023," said John Moore, senior investment manager at RBC Brewin Dolphin. "However, the company is still in a strong position, with a solid balance sheet, good land pipeline, and sales edging towards the upper end of guidance for the year."

Taylor Wimpey expects to hit the upper end of its previous target of achieving between 9,500 and 10,000 home completions this year. Full-year operating profits are also expected to be in line with forecasts of approximately £416m.

“We have delivered a good financial and operational performance in the first half, against a relatively stable market backdrop, reporting a good sales rate while continuing to protect value," chief executive Jennie Daly said.

“While interest rates and mortgage rates remain high, our teams continue to work extremely hard on the ground to support our customers through the homebuying process, and I would like to thank them for their ongoing commitment.”

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In addition to planning disruptions, the sector is also facing ongoing labour and supply chain challenges. Even so, analysts believe there is potential for the market to begin gathering steam again in 2025.

"The government’s commitment to building new housing and reforming the planning system could bring significant tailwinds for the housebuilding sector – Taylor Wimpey should be in line to be among the primary beneficiaries," added Mr Moore at RBC Brewin Dolphin.

"With plenty of cash in the bank and a more stable backdrop, management may have one eye on possible acquisitions after withdrawing from a deal for Cala and consolidation in the sector continuing.”

Shares in Taylor Wimpey closed yesterday's trading 0.8p higher at 159.35p.