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Taylor Wimpey reports rise in building costs

Housebuilder Taylor Wimpey saw its average home build costs rise during the first half of the year.The company said this was a result of "higher quality mix-driven product specification and the impact of build cost inflation". A reduction in inflation is anticipated as the industry adjusts to the increased demand for labour and materials, however.According to the group, labour cost inflation has also occurred but this was described as "controlled and manageable". Taylor Wimpey says its new house type range, along with its national deals and scale, will help mitigate expected increases in building costs.The firm reports making strong progress towards its medium-term targets, with its operating profit margin up 300 basis points to 16.1 per cent.Completions were up by 11 per cent, to 5,766 homes across the UK. There was a ten per cent increase in the average selling price of its properties, which rose to £206,000.Chief executive of Taylor Wimpey Pete Redfern said: "Our strategy, coupled with the improvements in the UK housing market, has enabled us to significantly improve the quality of our financial performance, whilst delivering sustainable growth of much needed new homes and contributing £116 million to local communities."Mr Redfern said the firm plans to increase the amount of cash it returns to shareholders in July, due to "confidence in the underlying strength and future performance of the business".The housebuilder says improvements have been seen in all of its regional markets during the first six months of the year. There is now a greater balance between London and the regions, with increases in sales and prices away from London and the south-east.There was also a reduction in market risk in the first half of 2014, due to the extension of the Help to Buy initiative and policymakers' increased focus on a longer-term view of managing risk and protecting growth.As well as making good progress towards its medium-term goals, the group says it is investing to ensure a sustainable future for 2015-17 and beyond. 

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