(Bloomberg) -- One of Britain’s biggest developers expects to build fewer homes this year, adding more pressure to the nation’s housing shortage, even as optimism grows over softening mortgage rates.

Taylor Wimpey Plc said it expects to sell between 9,500 and 10,000 UK homes in 2024 excluding joint ventures, helped by an acceleration in completions in the second half of the year, according to a statement Wednesday. That compares with about 10,400 in 2023, and roughly 13,500 in 2022.

“It is still early in the year and the macroeconomic backdrop remains uncertain,” Chief Executive Officer Jennie Daly said in the statement. “However, it is encouraging to see some signs of improvement in the market, with reduced mortgage rates positively impacting affordability and customer confidence.”

The homebuilder fell as much as 4.41% in early London trading.

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The past year has been turbulent for the nation’s developers as higher interest rates deterred buyers and increased their cost of capital. However, sentiment is slowly improving. A reduction in mortgage costs over recent months has eased the pressure on homebuilders, with lenders steadily lowering their rates since August.

Taylor Wimpey said its weekly private net sales rate increased to 0.67 in the year to Feb. 25, compared with 0.62 in the same period last year. The builder’s cancellation rate dropped to 12% in the period from 17% a year earlier, while its overall average selling price rose 3.5% to £324,000 last year. 

“We are well-positioned in an attractive market, with significant underlying demand for our quality homes and are poised for growth from 2025, assuming supportive market conditions,” Daly said in the statement.

(Updates with shares in fourth paragraph.)

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