I spent a few years throwing money into it Taylor Wimpey (LSE:TW) shares. Am I crazy? Quite possible.

I started buying a British construction company in 2023, stunned by its low valuation, juicy yields and reliability balance. But I knew there were challenges ahead.

Housebuilders suffered after the Brexit vote in 2016, with their numbers falling by 40% amid fears that the property market would crash. But that didn’t happen. The sector faced more uncertainty during the pandemic in 2020, yet there was no Covid-related crash. And when inflation and mortgage rates rose as a result of the war in Ukraine, a keen decline in home prices was predicted but never occurred. The war in Iran didn’t trigger them either, and Taylor Wimpey’s shares continue to fall.

Why have FTSE 250 stocks been hit so tough?

They are down almost 55% in the last five years and 33% in 12 months. Trading at around 80p, they are at levels last seen 13 years ago.

A quick look at Taylor Wimpey’s pre-tax profits over the last five years helps us understand why the stock has had such a bad run.

• 2025 – £146.5 million
• 2024 – £320.3 million
• 2023 – £473.8 million
• 2022 – £827.9 million
• 2021 – £679.6 million

The gigantic decline in 2025 was due to exceptional costs, mainly £243.8 million for fire protection of façade cladding following the construction of Grenfell. Most of the remaining issues were beyond the board’s control.

Higher inflation slowed down buyers and resulted in higher mortgage rates. This also increases labor and material costs. Then an raise in employers’ National Insurance contributions and two gigantic increases in the minimum wage reduced margins even further. 2026 was supposed to be a better year, but now mortgage rates are rising again as oil prices soar.

By the way, Taylor Wimpey is no exception, as every major British housebuilder has also been beaten.

Is this dividend sustainable?

That headline trailing yield of 11.75% is stunning, but unfortunately you won’t get it. The futures yield is expected to decline to 8.16% in 2026. The table below will show what is happening:

This massive 107% raise in 2021 was due to management compensation for canceling shareholder payouts during the pandemic. Dividends have been cut over the last two years, and in 2025 by as much as 19.45%. We cannot rule out further reductions until market conditions improve. When will it be?

I don’t see a quick solution to the war with Iran. Even if this happens, inflation is likely to remain high. Mortgage interest rate expectations change from day to day. The British economy is struggling, and Taylor Wimpey has already warned of a smaller order book and lower prices in 2026. However, on the plus side, it seemed able to give the green lightweight to the amount of £52 million share buyback.

I still believe in Taylor Wimpey. However, I expect that until the economic cycle returns to its favour, the company will continue to struggle and the dividend will remain under pressure. Income seekers with a long-term view may want to consider this, but I believe the recovery opportunities are less challenging on the FTSE at the moment.

Should you invest £5,000 in Taylor Wimpey Plc now?

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Mark believes there are 6 standout stocks that investors should consider buying right now. Want to see if Taylor Wimpey Plc made the list?

Harvey Jones owns shares in Taylor Wimpey.