Underlying demand in the housing market has eased the usual summer decline in trading at Taylor Wimpey, the housebuilder said.
Visitor levels and sales rates had fallen only 10 per cent in the slow-selling summer months, said Peter Redfern, chief executive, compared with a usual decline of 20 per cent.
But Mr Redfern warned that, in spite of a pick-up in sales volumes, the dynamics of the market would hold off a rapid return to high-volume building.
“As an industry, we’re not going to get back to building 170,000 houses a year in the short term,” said Mr Redfern. “Land supply and planning will be the biggest constraints in the next four to five years.”
In interim results, Taylor Wimpey said that a £527m write-off of its land holdings would mark the end of a wave of writedowns that has crept through the group since the merger that formed it in 2007.
“This gives us a sensible base to trade from,” Mr Redfern said.
However, the writedown was larger than what had been expected by most analysts and caused the value of the company’s net assets to dwindle to £1.4bn, a 35 per cent decline on the £2.2bn recorded last year.
Most housebuilders are currently valued against the net value of their assets, and the worse figure than expected caused the shares to fall 1¼p to 38¾p, a discount of about 12 per cent to their book value.
Mr Redfern said that the landbank was now better than those of many of Taylor Wimpey’s rivals, with two-thirds of plots located in the south of England and only 23 per cent being apartments.
Land buying was coming mainly from small deals, with most large operators sitting on holdings until prices recovered, he said.
“A lot of it is family farmland where the level of cash being raised is important, or businesses selling surplus old operating sites. There’s no big fire sale going on,” he said.
Turnover fell from £1.6bn to £1.1bn, delivering a slender £1m operating profit before the writedowns and £53.7m of other exceptional items were subtracted.
The pre-tax loss was narrowed from £1.4bn to £681.9m, although on an underlying basis it worsened from a £300,000 loss last year to a £68.9m loss this year.
Losses per share improved from 102.4p last year to 43.6p. For the third consecutive six-month period the group is not paying a dividend.
Get alerts on Construction sector when a new story is published