London : In spite of signs of stabilisation in the UK home-buying market and a gradual improvement in prices, there is unlikely to be a significant recovery in 2010, the UK's largest housebuilder said.

Taylor Wimpey, which endured a tough start to 2009, said it was encouraged by the period of stability it was experiencing, with forward orders at the end of last year 28 per cent ahead of the same time in 2008.

However, the group warned that a lack of mortgage availability would ensure that trading conditions remained constrained.

Housebuilding has been one of the worst affected industries during the downturn, with falling consumer confidence causing property sales to tumble.

While conditions are improving, the Royal Institution of Chartered Surveyors last week indicated that the number of properties being sold was still a third lower than at the beginning of 2007.

Pete Redfern, Taylor Wimpey's chief executive, said: "We are seeing a bit more optimism about the health of the wider economy and fears of a double-dip recession are receding, meaning that buyers feel a bit more confident about coming back to market".

Cost-cutting

Redfern also said the group had cut its building costs during the past 18 months by changing the way it constructed homes — such as installing fewer spiral staircases — and that it would continue to improve production efficiencies throughout 2010.

Taylor Wimpey changed its sales mix; reducing its production of apartments and focusing on building family-styled homes — which banks are more inclined to lend on due to the perceived risk of the buy-to-let market.

Taylor Wimpey's order book for the coming year was up 28 per cent on the same period last year at 5,431 homes.

The majority of the increase came from private order reservations, which rose 62 per cent to 3,048 homes, while affordable home reservation orders were up 1 per cent.

Sale price

The group raised its average sale price from £163,000 during the first six months of last year to £177,000 for the second half.

The shares fell 0.88 pence to close at 40.8p on Wednesday.

Taylor Wimpey has echoed most of its rivals in suggesting the time for gritted teeth may soon be over. But it seems keen to counterbalance any optimism with a healthy dose of caution. Indeed, much of its success this year will depend on the ability of customers to find affordable mortgages - something that is unlikely to materialise quickly.

Having written down aggressively the value of its land, Taylor Wimpey's shares, which trade on a forecast price to net asset value ratio of 0.8 times — a touch below the sector average — look cheap for now.

— Financial Times