Confidence returns as Taylor Wimpey sees demand pushing up its forecasts

PENT-UP demand and tight supply will prop up the UK housing market well into 2012, British housebuilder Taylor Wimpey predicted after it reported stronger margins and said it sees full-year profit forecasts being nudged higher.

“Overall, we expect it [full-year pretax profit] to be slightly better than the market is currently expecting,” chief executive Pete Redfern said yesterday. “We would expect them to upgrade a little after today,” he added.

Confidence is slowly creeping back to the housing market after a shaky close to 2010, and London-focused builder and developer Berkeley said last week it would return £1.7bn to shareholders over the next 10 years, as its profit soared by nearly a quarter.

“[There are] still significant levels of demand, and reasonable levels of demand [from buyers] that can actually get a mortgage ... Against that backdrop, we have a market with a pretty tight supply,” said Redfern.

Taylor Wimpey said it expects to complete 4,550 homes in the first half of the year against 4,804 homes in the same period last year, as it chases margins over volumes. Average selling prices ticked up slightly to £170,000 from £168,000 this time last year.

The company also announced the appointment of Mike Hussey as an independent non-executive director with effect from 1 July. Hussey is the chief executive of private property investment and development company Almacantar.