National housebuilders have delivered positive trading updates over the last few days, with improved average selling prices and margins compared to a year ago.
Taylor Wimpey, the UK’s largest builder by volume, reported a full year 2010 operating margin of 7% for its UK housing business (2009: 0.8%).
Completions reduced to 9,962 from 10,186 a year ago, with the average selling price up 7% to £171,000.
It said it had substantially achieved its target of reducing private build costs per square foot by 10% by the end of the first half. The year-end order book stands at 4,684 homes (2009: 5,431), which Taylor Wimpey reflected its strategy of prioritising margins over volume.
“We expect to make further progress in 2011 with regard to build cost reduction and have been encouraged by the enhanced sales rates, sales prices and margins that we are achieving on recent outlet openings,” it said.
Persimmon said it experienced a 10% growth in turnover during 2010 to £1.57bn, which would result in a significant increase in underlying profit before tax. Its completion volumes were up 4.5% to 9,384, while average selling prices rose 6% to £167,000.
Despite severe weather in December, Persimmon said margins on forward sales of about £565m were being maintained to the levels of recent months.
Barratt Developments said it would also register a significant boost in operating profits for the six months ended December 31, with margins increasing 5% and average selling prices up 6% to £176,000. Its forward sales are in line with a year ago at £645.7m.
Barratt said lack of availability of mortgage finance continued to constrain market growth in the near-term. To this end it is announced a tie-up with Hitachi Capital (UK) that will allow parents to borrow money to help children onto the property ladder.
The group said it expected houses to make up 65% of its total volumes in the current financial year. Completions were 4,832, (2009: 5,053).
