Housebuilders are in demand this morning after a cautiously optimistic update from Taylor Wimpey and a house price survey suggesting some new life in the market.
Nationwide's latest monthly snapshot of the housing market showed prices rose by 1% in April, pushing the annual rate of inflation into double figures for the first time since June 2007. The UK's biggest building society said the average price of a UK property has increased by 10.5% since April last year, and now stands at £167,802.
Also updating the market this morning ahead of its AGM, Taylor Wimpey says it has been meeting management's expectations in a "gradually improving, but still uncertain, trading environment."
It comments:
"We are encouraged by the ongoing signs of improvement across our main markets.
"Although economic and political risks remain in the UK, we believe that the underlying shortfall of new build housing and the strong levels of demand will continue to underpin the market. However, we remain concerned that the shortage of consented land will artificially constrain industry volume recovery in the medium term."
On the UK housing market, it says:
"Market conditions remain encouraging, with continued gradual improvements in mortgage availability and buyer confidence.
"We entered 2010 with a strong order book position and have continued to focus on building on this sales momentum and enhancing margins. We are approximately 99% sold for the half year and 74% sold for the full year targeted completions."
"Cancellations are running at long-term low levels of 14.8% for the year to date, which is also a significant improvement on the 18.5% in the equivalent period of 2009."
As for prices achieved on private homes, they are up 9% on a year earlier - of which around 5% results from active changes in mix and approximately 4% from underlying price increases.
The market likes what Taylor Wimpey is telling it and the shares are up almost 3% at 42.59p, among the biggest risers in a FTSE 250 up 29 points, or 0.3%, at 10328. Rival housebuilders are also outperforming the market, with Redrow up 2.6% at 152.4p, Persimmon up 1.2% at 488.1p, Bellway up 1.4% at 772p and Barratt Developments up 1.2% at 128.1p.
