Is this a one in ten chance of getting a 9.9% yield on Taylor Wimpey shares?

Taylor Wimpey (LSE: TW) shares have outperformed during periods of stock market volatility. That hurts me, as I have a large stake in the stock, but it creates an opportunity for new investors. Time to consider buying?

First, a warning. While i FTSE 250 The housebuilder offers a good yield, the stock has worked hard for years. Almost ten years ago, Taylor Wimpey reached £2. Today, it trades below 97p. Investors have collected a good stream of dividends, but those payments have only offset the huge financial losses.

However, with shares now trading at a 10-year low, this could be an opportunity to pick up an established British company at a deeply discounted price.

FTSE 250 high income

Home builders have had a hard time throughout. Since 2016, the sector has been plagued by Brexit, inflation, high mortgage rates, and the end of the Help to Buy scheme.

I bought Taylor Wimpey about three years ago, attracted by the yield, but the shares have been volatile ever since. I was really optimistic about the outlook for this year, with inflation and the Bank of England likely to cut interest rates down to 3%. I thought inflation and mortgage rates would lower costs, improve affordability and make consumers feel richer.

Eventually I got back to profit, with dividends reinvested, but then the Iran war started. Taylor Wimpey’s share price has fallen 15% in the past month, as rising oil prices fuel fears of renewed inflation. Mortgage rates are already rising, which could suppress demand, depress sales, and hurt profits. Over 12 months we are now down 14%.

Taylor Wimpey also has to absorb higher employment costs, due to increases in employer’s National Insurance and national wage increases that outpace inflation. It also had to spend several hundred million pounds to fix fire safety problems. With so many moving parts, stock price volatility is hardly surprising.

It does not fall on events in Iran. Results for the full year 2025 on 5 March showed a 54.3% drop in pre-tax profits to £146.5m. The order book fell slightly to £1.9bn from £2bn. The board quotes “uncertainty” ahead of last November’s budget and said operating profit would decline in 2026.

There was good. Revenue rose 13% to £3.8bn, while completions including engagements rose 6% to 11,229. The average private sale price jumped by £18,000 to £374,000.

Dividend shock

The next dividend looks amazing at 9.9%, but treat that headline figure with caution. The board cut the total payout by 1.25% in 2024 and a larger 19.5% in 2025, from 9.46p in 2024 to 7.62p per share. The forward yield for 2026 is now 7.85%. That’s still attractive, but below what investors expected.

With a price-to-earnings ratio of 12.2, the shares are not overpriced. I am still standing, hoping to recover while collecting income, although it is a little less than I expected. Taylor Wimpey shares are still worth considering from a long-term perspective, but the war and wider market uncertainty mean volatility is likely to continue. Patience is required.