Housebuilder Taylor Woodrow has said its margins are still under pressure despite signs of recovery in the UK housing market.

In a trading update issued on Tuesday it said the group housing order book on 30 June was £1.62 bn, an increase of 2% on last year. However, it said that although the UK market had shown “encouraging signs” of recovery, margins in the UK division “have remained under some pressure”.

The firm said its 2006 first-half margins in the UK will be close to those, excluding land sales, in the second half of 2005.

Its average selling price during the first half was £193,000, a small fall from £195,000 in the corresponding period in 2005, reflecting an increase in social housing contributions.

The group said the North American housing business was set to deliver a record first-half performance, with margins above the 17.5% level in the full year 2005.

The firm’s construction division has also had a successful first half, ending with an external order book increased to £1.09bn, compared with £777m in the same period last year.

The group said that it anticipated delivering modest growth in unit completions in the UK for the full year, together with some improvement on the margins in the first half. The group said it expected its full-year results to be in line with expectations.

Taylor Woodrow will announce its interim results on 3 August.