Taylor Wimpey has welcomed Labour’s planning reforms as an “important early step” to delivering more homes across England, as its half-year profits fell by nearly 60%.

The UK’s second biggest housebuilder said the new government’s proposed changes to the National Planning Policy Framework (NPPF) marked an important move to address the negative impact that planning changes brought in by the Conservative government had on housing supply.

The comments came as the company posted pre-tax profits of just £99.7m for the six months to 30 June, down 58% from the £237.7m it posted for the same period last year.

On Tuesday, the deputy prime minister and housing secretary, Angela Rayner, outlined a shake-up to planning rules aimed at increasing housebuilding and hit Labour’s manifesto target of building 1.5m new homes during this parliament.

The overhaul includes a new national target of delivering 370,000 new homes a year, with the government setting targets for councils to incorporate into local plans.

The north-west of England will be expected to deliver 38,000 homes, up from the 21,500 previously, while the east of England’s target will rise from 35,000 to nearly 45,000.

Local council housing targets had been been watered down in December 2022, when Rishi Sunak’s government made targets advisory rather than mandatory after up to 100 Conservative MPs threatened to rebel against the policy.

Taylor Wimpey, commenting on the new proposals in a trading update, said: “Though we expect changes to take some time to impact, we see the planning reforms outlined by the new government as key to unlocking future years land supply and the investment in skills and resources necessary to support future housing need.”

On Tuesday, the Home Builders Federation, the body that represents private housebuilders, said the scale of the planning changes had given hope to the home building industry after the elimination of housing targets had seen supply plummet.

Taylor Wimpey said in its update that it expected to hit the upper end of its previous target of achieving between 9,500 and 10,000 home completions this year.

It added that while the housing market had remained relatively stable in the first half of the year, mortgage costs were still higher than in recent years and were continuing to affect affordability for some customers, particularly first-time buyers.

The company said borrowing costs and regulatory pressures were negatively affecting housing associations to commit to affordable housing deals as part of section 106 agreements.

Section 106 agreements are deals struck by private housebuilders with affordable housing providers to ensure sections of newly built developments have a proportion, of affordable homes. Nearly half of all affordable homes are delivered this way.

Taylor Wimpey said: “While this is not expected to impact our 2024 outcome, lack of funding for housing associations has the potential to impact sector order books and the overall delivery of affordable housing in coming years.”

Labour has promised to deliver “the biggest boost to affordable housing in a generation” but housing associations and councils have warned that this will not be achieved without more funding.