Housebuilder Taylor Wimpey Plc adopted a cautious outlook for the current year on Thursday, after annual profits narrowly missed expectations.
Updating on trading for the year to 31 December 2025, the FTSE 250 firm said total group completions were 11,229, up from to 10,593 a year early.
UK home completions, excluding joint ventures, were in the middle of guidance range at 10,614, up from 9,972 a year earlier.
The overall average selling price was also higher, rising to £335,000 from £319,000.
Revenues rose 12% at £3.8bn, driven by higher volumes, average selling prices and land sales.
However, operating profits were slated to come in at around £420m, up on last year's £416.2m but below the £424m forecast.
The operating margin also narrowed, coming in at 11% against 12.2% in 2024.
Taylor Wimpey said that uncertainty around November's Budget had impacted sales through the second half and into 2026.
Jennie Daly, chief executive, said it had been a "robust performance...in the context of challenging market conditions".
However, looking to the current year, and Taylor Wimpey warned that the operating profit margin would likely to be lower than 2025.
It also expects trading to be more second-half weighted than in previous years.
Daly said: "While too early to anticipate the outcome of the spring selling season, we have seen a good level of enquiries and are well-positioned to support customers through their buying journeys.
"The government's planning reforms have been welcome, and we've seen increased momentum in our recent planning permissions.
"However, while affordability is slowly improving, demand continues to be muted, particularly among the important first time buyer category, which will constrain overall sector output."
As at 0830 GMT, the stock had shed 4% at 99.89p.
Richard Hunter, head of markets at Interactive Investor, said: "This is a thorny environment for the housebuilders and Taylor Wimpey is no exception.
"Planning permissions are beginning to gather some momentum, after government reforms, and affordability is improving in what should continue to be a lessening interest rate environment.
"But demand remains weak, especially among first-time buyers."
Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said the "only hiccup" in the update was the outlook for 2026.
He continued: "While that's not what investors were hoping for, the balance sheet remains in a great place - arguably one of the strongest in the sector. There's also a very attractive prospective dividend yield of 8.7% on offer.
"But as with all housebuilders, fortunes will wax and wane in line with the health of the broader economy and government policy."