UK construction sector
The UK housing market is recovering and builders are chasing profits from higher house pricesReuters

Taylor Wimpey said a resurgent UK housing market means it can set itself more challenging financial targets, sending the developer's share price soaring.

House prices are leaping as the economy recovers, mortgage approvals rise and housing supply remains constrained.

A lack of housing supply has left construction firms with opportunity to chase profits in the residential sector as property values climb.

"The UK housing market continues to perform strongly with sales rates and pricing at the upper end of our expectations," said Taylor Wimpey in a statement.

"We believe that the recent introduction of new regulations following the Mortgage Market Review, which require detailed checks on borrowers and imposes additional responsibilities for lenders, is a positive move for the long term health of the market, and we do not expect these changes to adversely impact our business."

Because of the boon from the housing market, Taylor Wimpey said it would now target an average operating profit margin of 20%, among other new goals.

Following the statement, Taylor Wimpey's share price lifted by as much as 6% in early trading on the London Stock Exchange.

In its monthly index for April, Nationwide said the average price of a UK home lifted by 10.9% to £183,577 across the year.