Taylor Wimpey said it would return £250 million (€304 million) to shareholders over the next two years after the UK's recovering housing market helped the housebuilder's full-year profit jump by almost half.

The company said today it planned to pay shareholders £50 million in 2014 and £200 million in 2015, with plans for further significant annual payments from 2016. It proposed a final dividend of 0.47 pence per share, giving a total for the year of 0.69 pence.

“We have now reached the point where the strategy is creating surplus cash,” Taylor Wimpey said.

The UK’s housing market recovery sped up last year after the government launched a scheme to help struggling house buyers to obtain mortgages, shoring up demand for the homes built by the likes of Taylor Wimpey.

Other housebuilders have been returning cash to shareholders on the back of this step up in buyer demand. Persimmon yesterday brought forward its £1.9 billion capital return plan.

Jefferies analysts cheered the plans, saying that the structure was simpler and cash would be returned more quickly than they anticipated. “Should current market conditions persist, we expect that the ongoing cash return dividend could be in the region of £200-250 million per annum.”

Taylor Wimpey said its profit before tax and exceptional items for the year to December 31st rose 47.6 per cent to £268.4 million as revenue increased 13.7 per cent to £2.3 billion.

The company was expected to post pretax profits of £254-330.8 million, against average revenues of £2.27 billion, a Thomson Reuters survey of 14 analysts showed.

Taylor Wimpey’s order book at February 23rd stood at £1.49 billion. It completed 11,696 homes over 2013, and said it was currently about 55 per cent forward sold for 2015 completions.

Reuters