Housebuyers are showing signs of moving back into the market, two of the country's biggest builders said yesterday.
Solihull-based Taylor Woodrow took a relatively cautious line in a pre-close period trading statement.
It said: "The UK housing market remains competitive and whilst we have seen some encouraging signs on customer demand in the last quarter, it remains too early to forecast 2006."
Its smaller rival, Bovis Homes, also passed on predicting trends for the next 12 months but added: "There are encouraging signs of improving consumer confidence."
Woodrow, which according to City whispers has been considering a possible merger with George Wimpey, said home completions in the UK, where it trades under the Bryant name, fell by ten per cent to 8,178 in 2005, reflecting "challenging market conditions" and the allocation of capital into its North American operations.
A fall in average selling price to £185,000 from £197,000 in 2002 reflected an increase in the proportion of social build and apartments in the group's output.
"Demand in the final quarter was stronger than in the equivalent period of 2004 and we start 2006 with an order book of £411 million, up one per cent on last year, with 4.2 per cent fewer sites," yesterday's statement said.
The UK downturn was offset by a record year of results from North America.
Woodrow said its decision to increase investment in the region over the past three years paid off with an 8.2 per cent rise in home completions to 3,932 while average selling prices jumped by 21 per cent to $453,000 (£256,500).
It forecast another strong year from the region, even though it expected some moderation in house price inflation in certain hotspots.
The company said it expects its 2005 profits, due to be announced on February 28, would be line with market expectations.
Bridgewell Securities analyst Chris Millington said: "Overall this is a good statement and backs up Taylor Woodrow's strategy of being geographically diverse.
"We will retain our neutral stance on the stock, believing there is more upside in the other housebuilders."
Bovis Homes said it expected its 2005 profits to be marginally below the market consensus.
Margins are under pressure from the company's decision to diversify away from its traditional mid-market suburban and commuter belt developments into smaller, more affordable properties and social and partnership housing projects.
Bovis said the average size of its homes reduced by 11 per cent last year while the average price per square foot increased by three per cent.
Woodrow's and Bovis's comments were in line with an earlier clutch of trading statements from the house-building sector.
Wimpey, Redrow and Galliford Try all said they had spotted signs of recovery in the market in recent days.
