Housebuilder Taylor Wimpey has said the housing market is recovering faster than initially thought as buyers benefit from the a range of government incentives north and south of the Border.

The company believes profits next year will be significantly higher than previously thought because of the boost.

Investors also cheered as the housebuilder said it expects to pay out a dividend next year and will review a special dividend for 2022.

Shares closed 18.6 per cent up at 146.2p.

READ MORE: Coronavirus: Taylor Wimpey to resume work 

The company currently has 28 sites in operation across Scotland, with 16 sales outlets in the west of the country and 12 in the east.

A spokesman said they are all currently unaffected by restrictions as all are in areas in tier three of the Scottish Government ratings or lower.

The spokesman said the company is mindful of potential future labour market pressures but added it is cautiously optimistic over the expected position.

Pete Redfern, chief executive said: “The trading backdrop remains resilient and the quick recovery of the housing market is testament to the underlying strength of demand and supportive lending backdrop.”

He added: “Looking ahead, we are on track to deliver full year 2020 results towards the upper end of market expectations and with strong operational momentum and positive forward indicators, our confidence in 2021 has increased.

“As a result, assuming the market remains broadly stable, we 

expect to deliver 2021 operating profit materially above the top end of the current consensus range."

Customers have benefited from the extension to the Government's Help to Buy scheme and from the Stamp Duty holiday, which runs until March next year, the company said. Land and Buildings Transaction Tax rebates are also available to some buyers in Scotland.

Taylor Wimpey said it has still been able to hold customer appointments and viewings, with builders allowed on sites during the new lockdown south of the Border.

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It said: "The early signs suggest that customers wish to continue to progress purchases, with forward sales indicators at healthy levels, whilst our outlet and product profile is well positioned to meet increased customer demand for well-designed homes in quality locations with good community amenities."

The company added that private average selling prices remain ahead of 2019 and it hopes to cash in on future demand, spending £826 million on land purchases, across 70 sites including with 14,500 plots.

It said this was above usual levels, with the cash secured from an investor fundraiser, and they expect an stable, we expect to deliver 2021 operating profit materially above the top end of the current consensus range."

Customers have benefited from the extension to the Government's Help to Buy scheme and from the Stamp Duty holiday, which runs until March next year, the company said. Land and Buildings Transaction Tax rebates are also available to some buyers in Scotland.

It said: "The early signs suggest that customers wish to continue to progress purchases, with forward sales indicators at healthy levels, whilst our outlet and product profile is well positioned to meet increased customer demand for well-designed homes in quality locations with good community amenities."

The company added that private average selling prices remain ahead of 2019 and it hopes to cash in on future demand, spending £826 million on land purchases, across 70 sites including with 14,500 plots.

It said this was above usual levels, with the cash secured from an investor fundraiser, and they expect an average return on capital employed of 34%.

Cost reductions have also helped boost the company's accounts, with changes expected to save around £15m in costs from next year.

These changes include redundancies at head office and a "rationalisation of our London operating structure to focus on affordable price points that meet the affordability needs of Londoners, and a series of reductions in central and business unit overhead levels".

Separately, Taylor Wimpey said its Spanish business is expected to return to normal by 2022.

Joshua Mahony, senior market analyst at IG said that “Taylor Wimpey is going from strength to strength with a little help from the government”.

“With Taylor Wimpey expecting profits ‘materially above the top end’ of estimates, traders are seeing value across the sector at large.

“Crucially, the government's decision to allow viewings to continue during this second lockdown does ensure the sector can take advantage of the remaining demand surge coming thanks to Rishi Sunak’s stamp duty holiday.”