Taylor Wimpey has delivered a confident trading statement for the second half of its financial year with sales growing and further growth expected next year.

The housebuilder said today that its 2017 operating profit margin will be higher than last year’s 20.8% and 2018 would be even better.

Chief executive Pete Redfern said: “Taylor Wimpey has performed strongly during the second half of 2017, delivering excellent sales rates and making further good progress against our operational targets. While we are alert to potential political and economic risks, demand for new housing remains high across the UK and market conditions are favourable. Notwithstanding the recent small increase in the base rate, we have continued to see stability in trading patterns.

“Looking ahead, we are on track to meet our full year expectations and deliver further growth and performance improvement in 2018. With a strong balance sheet in place and a high-quality landbank, our business is very well positioned to deliver sustainable growth.”

Build costs are expected to increase 3-4% this year, as previously indicated, with the greater pressure coming from labour costs and a more modest level of cost inflation in building materials.

Taylor Wimpey said that customer demand in recent months had particularly been supported by healthy employment trends, a competitive mortgage market and the UK government’s help-to-buy scheme.

It said that sales rates for 2017 so far were strong, at 0.81 sales per outlet per week, compared to 0.75 during the same period last year. Cancellation rates for the year are flat on 2016 levels, at 13%.

It did, however, reiterate that build costs are expected to increase slightly – by around 3 to 4 per cent – this year, with the pressure coming from labour costs and a modest level of cost inflation in building materials.

It said that net cash at the end of December is expected to be around £500 million after dividend payments of around £450m to shareholders.