by business editor Trevor Sturgess

Taylor Wimpey has claimed there were signs of an upturn in the housing market despite posting interim losses of £682million.

The housebuilder with sites across the county said it saw stability in the UK market.

The large loss was mainly attributable to writedowns and exceptional items. Without these, the company made a pre-tax loss of £68.9million.

Chief executive Pete Redfern said the company had made a small operating profit, adding that there were signs that mortgage lending was gradually improving in the UK. The company would be opening 40 new sites in the second half of the year.

He told reporters: "We're seeing a stable market and the prospect of potential recovery in UK housing and we see stronger average selling prices in the second half."

Shares fell 4.8 per cent to 38.2p in early trading. Charlie Menegatos, senior trader at Accendo Markets, said: "The interim numbers show clear signs of improvement, and a further stabilising in property in the UK and US will no doubt do wonders for the share price recovery in the longer term.

"But Accendo Markets believe investors will want further evidence of progress before bidding the shares higher, and as such we remain short term sellers."

Other housebuilders like Kent-based Bovis, have echoed Taylor Wimpey’s remarks by reporting a leveling-off of decline.

But Bovis blamed a continuing shortage of mortgage finance for weak demand. This will not be helped by dismal results from Lloyds Banking Group and Northern Rock, both bailed out by the taxpayer.

Meanwhile, Lloyds has reported losses of £4billion on the back of its disastrous takeover of HBOS, while Northern Rock lost £724million.

The performance of both banks was in stark contrast to the stellar achievements of Barclays and HSBC, which each reported profits of £3billion.