Taylor Wimpey (LSE: TW.) this might be my choice FTSE250 currently, with a forecast dividend of 9%.

The Bank of England has just cut interest rates to 3.75%, the lowest level we have seen since the beginning of 2023. Governor Andrew Bailey actually said that “with each cut, it becomes closer to how far we will go” But the direction may only turn downward in 2026 and beyond. Anything that helps make mortgages even a little cheaper should be a boon for people buying and building homes.

Taylor Wimpey’s stock is not doing well. It’s down 16% year-to-date in 2025, and it’s down a painful 36% over the last five years.

But we’re in this investment for the long haul, right? And how many businesses can have a more secure long-term future than selling into the UK’s chronic housing shortage?

In Taylor Wimpey’s November 12 trading update, CEO Jennie Daly told us that pre-Budget uncertainty meant “milder market conditions in the second half of this year“But the company maintained its full-year forecast in line with previous guidance – this means around 10,400-10,800 homes were delivered, excluding joint ventures.

The danger of dividends

A high dividend yield may mean that investors have doubts about the company’s ability to pay dividends. In the case of Taylor Wimpey, the company does not provide guidance on actual expected dividends.

Instead, it has a policy of paying out 7.5% of net assets, or at least £250 million a year. This meant this year’s interim rate actually fell slightly, to 4.67p per share from 4.8p at the same stage a year ago.

We won’t know how much the second half will bring until the results are revealed. This means we will have to wait until March. This adds additional uncertainty to the usual risk that any dividend could be cut at any time.

Long-term perspective

Interest rates are falling and that’s a good thing. However, I fear that it may take some time for the UK housing market to get back on its feet.

With our pockets under pressure, many people still have higher spending priorities than finding a fresh home. I expect many people will wait for a clearer picture of the direction of long-term interest rates.

This means Taylor Wimpey’s dividend could rise or fall this year, with even greater uncertainty. I think this could cause share prices to weaken further, perhaps over the next two or three years.

To buy or not?

Investors who want to live off regular passive income may want to turn to safer alternatives to the FTSE 250. But I reinvest my dividends and short-term ups and downs don’t bother me too much. Investors in the same situation should consider Taylor Wimpey shares now.

Buying now would escalate Persimmon shares I already own, which is not conducive to diversification. But I’m considering it.