Taylor Wimpey Plc (TW/), the U.K’s second-largest homebuilder by volume, rose to the highest in five years after saying customer interest was growing and homes reserved for purchase increased in the first quarter.
The homebuilder, based in High Wycombe, England, was up 2.7 percent to 96.55 pence at the 4:30 p.m. close in London, the highest since May 2008. The Bloomberg EMEA Homebuilders Index gained 1.9 percent.
About 300 homes have been reserved since the U.K. government said in March it would provide a loan of as much as 20 percent of the value of a newly built home worth 600,000 pounds ($925,000) or less, Taylor Wimpey said in a statement today. Customer interest was up 15 percent for the year before the program was announced and there have been “further significant increases” since then, according to the statement.
“We have seen an increase in visitor levels and reservations, driven by improved customer confidence and helped in recent weeks by the government’s budget announcements,” Chief Executive Peter Redfern said in the statement. “This, together with the quality of our locations and the inherent value in our landbank, is enabling us to drive improvement.”
U.K. homebuilders have boosted margins by focusing on higher-end homes and building on discounted land after a slump during the financial crisis caused sales to drop. Taylor Wimpey’s order book has risen 27 percent in value since the end of the year and 18 percent from the same time last year, the company said today.
Mortgage lending hasn’t increased “and continues to act as the principal constraining factor” on Taylor Wimpey’s performance, Redfern said in the statement.
The homebuilder has bought or gained options to purchase about 3,000 land plots this year and has approved the purchase of more than 4,000 others, according to today’s statement.