Taylor Wimpey has lowered its housing and profit forecasts after higher mortgage rates and the cost of living hit new home demand.

The housebuilder’s shares were down 4.5% on Wednesday to 78p after the group warned that a weaker-than-expected autumn selling season was weighing on customer demand and affordability.

The company now expects to build 10,500 homes this year, below the 10,600 to 11,000 range forecast in March.

It also expects operating profit to come in towards the bottom end of analysts’ consensus estimates, which range from £262m to £299m.

Taylor Wimpey blamed higher mortgage rates and rising living costs for discouraging prospective buyers.

The weaker market has also coincided with higher construction costs linked to the conflict in the Middle East.

Chief executive Jennie Daly said the autumn selling season had been “more subdued”, with affordability continuing to constrain demand.

“We remain focused on supporting customers, operating efficiently, maintaining our strong balance sheet and progressing our strategy,” she said.

The slowdown is reflected in the group’s sales figures. Taylor Wimpey’s net private sales rate stood at 0.69 for the year to date, down from 0.72 over the same period last year. Since June, the rate has fallen further to 0.60, compared with 0.63 a year earlier.

Daly welcomed Labour’s Your First Home programme, due to launch in April, saying it could help more people onto the property ladder. She added that the company’s offering for first-time buyers and expanding network of sales outlets put it in a strong position to benefit.