Housebuilders close door on six years of pain as prices jump


One of Britain's biggest homebuilders says nearly six years of pain for the housing market is at an end after the first major improvement in conditions since the financial crisis.

Taylor Wimpey says the housing market had "shown measurable improvement for the first time since the downturn of 2007-08". It gave the most bullish verdict yet on a market buoyed by an improving economy, easier lending conditions and the Government's Help to Buy initiative.

The upbeat comments, from the UK's second-largest player by homes completed and nearly a victim of the crash, sent investors piling into housebuilding shares as the City digested a raft of good news elsewhere in the sector. Rival Redrow provided surprise cheer for the sector in an unscheduled update flagging up profits "materially" ahead of market hopes and pushing the shares to a five-year high. Galliford Try is also on course for record results.

The buoyant state of the wider market was also underlined by the latest figures from lender Halifax, showing a bigger-than-expected 0.6 per cent rise in house prices last month as increased demand from buyers outstripped supply. Halifax said prices in the quarter to June were 3.7 per cent ahead of a year earlier, the biggest increase since August 2010.

Taylor Wimpey chief executive Pete Redfern said the company was selling about two homes every three weeks from each of its sites - a return to "normality" if not boom levels. He said: "This is the first time we have seen relatively normal sales rates. We're getting close to the normal average levels where we've been in the long term over the past 25 years. We've seen much more interest from first-time buyers as well as at the top end of the market."

The homebuilder was created in 2007 through a £5 billion merger at the  peak of the housing boom, but almost sank under the weight of its £1.7 billion debts and took a £1 billion hit on the value of its land in 2008. But today it said conditions had improved to the extent that it could unwind some of the provision, meaning a profit windfall in the housebuilder's next results.

Anthony Codling at Jefferies said: "If ever we need proof that the housing market is recovering, we have it now. Whilst we expect the quantum to be small, the symbolism is quite the opposite."

Taylor Wimpey's shares added 3.75p or 4 per cent to 100.7p, while Redrow rose 10.7p or 5 per cent to 232.75p.

Start your day with The Independent, sign up for daily news emails
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Digital Optimisation Executive - Marketing

£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

Recruitment Genius: Financial Reporting Manager

£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Day In a Page

Sepp Blatter resignation: The beginning of Fifa's long road to reform?

Does Blatter's departure mean Fifa will automatically clean up its act?

Don't bet on it, says Tom Peck
Charles Kennedy: The baby of the House who grew into a Lib Dem giant

The baby of the House who grew into a Lib Dem giant

Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

The harrowing testament of a five-year-old victim of Syria's endless civil war

Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
The future of songwriting: How streaming is changing everything we know about making music

The future of songwriting

How streaming is changing everything we know about making music
William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

Recognition at long last

Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
Beating obesity: The new pacemaker which helps over-eaters

Beating obesity

The new pacemaker which helps over-eaters
9 best women's festival waterproofs

Ready for rain: 9 best women's festival waterproofs

These are the macs to keep your denim dry and your hair frizz-free(ish)
Cycling World Hour Record: Nervous Sir Bradley Wiggins ready for pain as he prepares to go distance

Wiggins worried

Nervous Sir Bradley ready for pain as he prepares to attempt cycling's World Hour Record
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back
Thurston Moore interview

Thurston Moore interview

On living in London, Sonic Youth and musical memoirs
In full bloom

In full bloom

Floral print womenswear
From leading man to Elephant Man, Bradley Cooper is terrific

From leading man to Elephant Man

Bradley Cooper is terrific