Housebuilder says Bank鈥檚 intervention will 鈥渞educe the risk of overheating鈥 as it posts strong trading update

Planning Houses

Housebuilder Taylor Wimpey has welcomed the Bank of England鈥檚 planned intervention in the housing market, saying it will 鈥渞educe the risk of overheating鈥.

In a strong trading update, Taylor Wimpey said the Bank of England鈥檚 move to limit large loans to housebuyers would increase 鈥渢he long term health of the market鈥 and it did not anticipate any adverse impact on customers.

The Bank鈥檚 governor Mark Carney unveiled a raft of measures last month, including tougher checks on whether borrowers can afford to repay their loans when interest rates rise. Shares in housebuilders soared on the news after the measures were less stringent than feared.

In its trading statement Taylor Wimpey said it performed 鈥渟trongly鈥 in the six months to 29 June 2014 with sales rates and pricing 鈥渁t the upper end of our expectations鈥, ahead of publication of its half-year results later this month.

Taylor Wimpey expects operating profit margin for the first half to be around 16%, up from 13.1% the previous year, while it 鈥渞emains on track鈥 to increase operating margin by 3% this year.

During the first half the firm completed 5,766 homes, up from 5,191, average selling price rose 9% to 拢224,000, up from 拢205,000 and the order book grew to 拢1.6bn, up from 拢1.3bn.

On Help to Buy, Taylor Wimpey said: 鈥淭he Help to Buy equity loan remains very popular with our customers, predominately first time buyers, at an average selling price of c. 拢207k.

鈥淒uring the first half of 2014 we completed approximately 42% of private homes through the scheme and are currently working with around 2,000 households to take the first step to home ownership or to move up the housing ladder.鈥

The firm said house prices increased across all its regional markets.