HOUSEBUILDER Taylor Wimpey signalled it will report a major hike in profits even though mortgage availability remains restricted.
It said it is hopeful the Bank of England's funding for lending scheme will improve mortgage conditions for consumers.
The company further noted it has recently seen some major lenders reduce their mortgage rates and was keen for that trend to continue.
That came at Taylor Wimpey predicted a 40% rise in operating profit across 2012 with full-year profits at the upper end of expectations. Operating margin is expected to come in ahead of the 8.8% booked in 2011 and the 11.1% recorded in the first half of 2012.
The performance has been driven by a 7% increase in house completions to 10,886 with average selling prices up 6% to £181,000 overall and by 6% to £197,000 when just considering private sales.
The net private weekly reservation went from 0.54 homes per outlet to 0.58 with cancellation rates down from 15.8% to 15.2%.
The order book at the end of 2012 was at £948 million and 5966 homes which was ahead of the £835m and 5379 residences recorded at the close of 2011. The UK Government's FirstBuy scheme had been used in 1203 first time buyer sales in the year.
The English NewBuy and Scottish Government backed MI New Home schemes – offering 95% mortgages – were used in 546 sales.
Pete Redfern, chief executive, hailed 2012 as a year of "significant progress and said: "We are delivering on the strategy that we set out in 2011, including a return to UK double digit operating margin ahead of schedule."
Mike van Dulken, head of research at Accendo Markets, said: "The observation that the [full year] group operating margin will be better than 2011's 8.8% and [the first half of] 2012's 11.1%, and back at double-digit levels, also suggests continued strong improvement in profitability in [the second half] of last year – in an environment of pricing pressure this is a welcome message.
"Management's outlook points to better consumer confidence in the first fortnight of 2013, and while it is much too early to extrapolate for the full year given the myriad moving parts which can affect the global markets consumers' ability/desire to buy property looks solid."
Shares in Taylor Wimpey were down 1.2p at 73.05p.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article