SHARES in Taylor Wimpey jumped over seven per cent yesterday after the housebuilder raised its profit targets on the back of a resurgence in the housing market.
Housebuilders have enjoyed a dramatic recovery over the past year thanks to the government’s Help to Buy scheme and improving consumer confidence, which has helped fuel demand for new homes.
Prices have soared as a supply of new homes fails to keep up with demand.
The sector, led by Taylor Wimpey, helped push the FTSE 100 to its highest level in 14 years yesterday, with Barratt Developments and Persimmon also closing higher.
Taylor Wimpey chief executive Peter Redfern said: “The UK housing market continues to perform strongly with sales rates and pricing at the upper end of our expectations.”
He said a much improved housing market had given the group the confidence to set new targets for 2015 to 2017, including a higher average operating margin of 20 per cent over the three year period.
It also hopes to achieve a return on net operating assets of at least 20 per cent per year and an average increase in net assets of 15 per cent per year.
This compares to its previous targets of 15 per cent and 10 per cent.