Homebuilding market – ‘subdued’

The UK housing market is slowing as interest rates begin to cut deeep, the UK’s biggest homebuilder has said.

Taylor Wimpey – formed by the merger of George Wimpey and Taylor Woodrow – said though the market was “subdued”, conditions remained ‘stable’.

It said that short-term conditions in the struggling US housing market “remained difficult to predict”, but it was confident for the longer haul.

The firm saw pre-tax profits of £259m in the six months to 30 June.

Shares climbed 5% as it revealed it had found an additional £30m in cost savings from the merger and announced plans for a £750m share buyback.

Taylor Wimpey said that it would concentrate on forward selling as it tried to beat the tough trading environment, with its order book 5% ahead of last year.

UK interest rates have risen five times since August 2006 and now stand at 5.75%, pushing up the cost of mortgages.