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Last Updated: Tuesday, 31 July 2007, 10:55 GMT 11:55 UK
Homebuilder sees 'subdued' market
US construction workers
Taylor Woodrow and Wimpey have US operations that overlap
The UK housing market is slowing as interest rates begin to bite, the UK's biggest homebuilder has said.

But Taylor Wimpey - formed by the merger of George Wimpey and Taylor Woodrow - said though the market was "subdued", conditions remained stable.

It added that short-term conditions in the struggling US housing market "remained difficult to predict", but it was confident for the longer haul.

The firm saw pre-tax profits of 259m in the six months to 30 June.

Shares climbed 5% as it revealed it had found an additional 30m in cost savings from the merger and announced plans for a 750m share buyback.

Taylor Wimpey said that it would concentrate on forward selling as it tried to beat the tough trading environment, with its order book 5% ahead of last year.

UK interest rates have risen five times since August 2006 and now stand at 5.75%, pushing up the cost of mortgages.

In the US, the firm said that plunging land values in Florida and California had forced it to write down 60.9m from its books, on top of a 25m provision announced in May.

Rising interest rates and higher mortgage defaults, especially among the sub-prime market, have dented the US housing market.

Wimpey and Woodrow 'eye merger'
25 Mar 07 |  Business
Building firm enjoys housing boom
10 Jan 07 |  West Midlands
US housing blow to Wimpey profit
20 Dec 06 |  Business
Tough year to erode Wimpey profit
06 Jan 06 |  Business
Housebuilders suffer UK slowdown
06 Sep 05 |  Business

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