STOCKS NEWS EUROPE-Taylor Wimpey leads UK housebuilders' surge

LONDON, May 13 (Reuters) - Shares in Taylor Wimpey (LSE: TW.L - news) climb by 7.6 percent to be the top riser on the FTSE 250 mid-cap index after the strong British housing market prompts the housebuilder to increase its profitability targets.

Taylor Wimpey, Britain's third largest housebuilder by market value, rises to as much as 110 pence.

Shares in rival housebuilders Barratt Developments (LSE: BDEV.L - news) , Persimmon also advance to be the top two risers on the FTSE 100 blue-chip index while Crest Nicholson (LSE: CRST.L - news) shares edge up 2.3 percent.

"It's very positive news for Taylor Wimpey because they're upgrading guidance to the market on expected results," says Jefferies analyst Anthony Codling.

"There is broad read-across because the things that are leading to the increased guidance at Taylor Wimpey also apply to the other companies in the sector as well."

Taylor Wimpey says that in 2014 it expects to deliver an operating margin increase of at least 300 basis points, and a return on net operating assets of at least 20 percent. It previously said it would deliver at least 200-300 basis points of operating margin improvement over the year.

It is also targeting an average operating margin of 20 percent over the period 2015-2017, a return on net operating assets of at least 20 percent per year, as well as average increase in net assets of 15 percent per year over the period.

British housebuilders have enjoyed strong sales and sharp rises in their share prices over the past year after government schemes to support cash-strapped buyers shored up demand for their homes and triggered a wider recovery in buyer sentiment across the market.

Reuters messaging rm://brenda.goh.thomsonreuters.com@reuters.net