Britain's housebuilders get back on the ladder to a boom As this activity provides an additional boost to the sector, housebuilder Bovis is tomorrow expected to report pre-tax profits of £51.5m for 2012, up from £32.1m, on sales rising from £364.2m to £429m. The same day, its bigger rival Persimmon should post pre-tax profits of £215.8m, up from £143.7m, on sales up from £1.5bn to £1.7bn. Tuesday is then expected to see Redrow, the housebuilder which founder Steve Morgan recently tried to take private, post half-year profits of £25m, up from £15.4m. Barratt on Wednesday should then report £45m pre-tax profits for the half-year, up from £20.6m. The week should end on a high, with Taylor Wimpey's full-year results forecast to show profits nearly double at £173.6m, from £89.8m. There is, of course, light and shade within the sector. Peel Hunt analysts call Bovis the "most over-valued stock," seeing better value and lower risk elsewhere. Barratt is also seen as a "riskier play with its shorter land bank" among other factors, although they note that currently investors are embracing risk. However, what the builders do appear to have in common is that they are all feeling a benefit from positive signals in the wider market. That was a message reinforced by Countrywide, the estate agents and lettings group, when it announced plans on Wednesday to float in what would be London's second IPO this year, behind housebuilder, Crest Nicholson. Grenville Turner, Countrywide's chief executive, said one of the factors prompting the £200m float was evidence investors had seen that the UK housing market is beginning to recover. He did warn, however, that caution was the "name of the game." "Our view is the key legs of recovery in the property market are beginning to be put in place," he said. As we all know, the property market is impacted by many global issues and my nervousness is probably more around those. Nor was it a coincidence that it was Crest Nicholson which earlier this month became London's first float of the year. The company enjoyed strong demand for its shares as it re-launched on the stock market, five years after it was taken private as the industry headed into the crash. In contrast, there were just two London floats across the whole of 2012, neither of which were housing-related. So what has changed? Although welcoming government initiatives such as NewBuy, where the state part-guarantees lending to buyers of new-build properties, builders have been sounding far more positive about an initiative that was not directly aimed at them - the flagship Funding for Lending Scheme (FLS). It is to this that much of the improvement in the wider housing market is being attributed, as the initiative is credited with stimulating lending and helping to open up the mortgage markets. The emergency £80bn scheme was launched last July in an attempt to reduce lending costs for households and businesses, and, in turn, increase the flow of credit. It works by giving banks access to low-cost funding on condition they improve, or at least keep stable, their own net lending. At the same time, the Financial Services Authority, the City watchdog, has relaxed certain regulations on banks' capital and liquidity, meaning their appetite to lend grew in the last six months of 2012. While signs that lending to small businesses is still lacking, the mortgage market is now showing the effects. Mortgage approvals for house purchases reached an 11-month peak in December, as lenders approved 55,785 new mortgages, according to the Bank of England. When the impact of stamp duty distortions was stripped out, that was the strongest figure since the financial crisis hit. The trend should continue this week, with approvals expected to have climbed to 56,800 when the Bank releases its January data on Thursday. Greg Fitzgerald, chief executive of housebuilder Galliford Try, believes the FLS is turning out to offer a bigger boost to housebuilders than sector-specific schemes. He spoke after the company reported last week that sales were up from £678.3m to £746.8m. "I think a lot of it is do with improved mortgage conditions," he said. The FLS is definitely kicking in. It's not that difficult at the moment to get a mortgage between 85pc and 95pc [of the purchase price], which is pretty good. As the scheme supports housing market activity, consumers' expectations of rising house prices may also play a part, incentivising people to look at buying now. The Nationwide house price index is expected on Friday to reveal a 0.2pc rise in house prices from January, which saw a 0.5pc monthly rise. Investec economists see house prices "clawing their way off the bottom through 2013, as the housing market starts to find its recovery feet, helped by a continued recovery in the UK jobs market." The caveat is that any pick-up in the housing market, as with the housebuilding sector, is coming off a weak base. Despite the rise in mortgage approvals, they are still only around half the level they were before the financial crisis. Some may also argue that rising house sales and, as a result, prices, will continue to shut out first-time buyers and should not be encouraged. But an under-pressure Chancellor will welcome any sign of improving activity in the housing market as offering a potential boost to the UK's economic growth. Indeed, the thinking is that the success of the FLS may prompt the Government to increase its size as soon as next month's Budget. And that, again, would mean good news for housebuilders.