Wimpey echoes its peers in a positive housing market

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HOUSEBUILDER Taylor Wimpey pointed to more signs of life in the housing market after a year of surging profits and margins.

The builder echoed comments from peers including York-based Persimmon by reporting a gradually improving mortgage market, boosted by Government stimulus schemes.

“It’s definitely a more positive start to the year than we’ve seen in the last two to three years,” said Taylor Wimpey’s chief executive Pete Redfern.

There are “grounds for cautious optimism around the market where the mortgage market feels a bit better and customer confidence feels stronger than we’ve seen in a while”, he added.

Government schemes to spur the market include Funding for Lending, which offers banks and building societies discounted funds if they increase lending to businesses and homebuyers, while NewBuy underwrites some of the risk for lenders.

“There is undoubtedly a significant impact from the Funding for Lending scheme... but I don’t think it’s all that, I think there’s generally a slightly more positive perspective among banks, there’s a bit more competition,” said Mr Redfern.

Taylor Wimpey, Britain’s second largest housebuilder by market value, beat forecasts to post a 106 per cent rise in 2012 underlying pre-tax profit to £185.3m. Revenue increased 11.7 per cent to £2.02bn.

Its UK operating margin increased to 11.5 per cent from nine per cent in 2011. Mr Redfern said the company hoped to increase this to 16 per cent in the next three years as it continues to buy development land at competitive prices.

Big housebuilders have been helped by building on land acquired cheaply during the downturn, plus erecting more family homes and squeezing costs.

The company’s order book stood at over £1.08bn at February 24, up from £982m a year earlier. It is already 50 per cent forward-sold for its targeted 2013 completions.

It sold 10,886 homes during 2012, up seven per cent on 2011.

Sales rates and visitor trends have improved in recent weeks, it added, particularly in the south and Midlands.

It started the year with 327 active outlets including sites in Boston Spa, York, Barnsley, Bradford, Leeds, Sheffield and Wakefield. Its sales and land purchases are weighted about 60 per cent to the south and 40 per cent to the north.