housebuilder Persimmon yesterday posted record profits as it said tight cost controls helped offset a "challenging" housing market in the North.

The York group reported half-year pre-tax profits of £281.1m, up 9.8 per cent on the same period last year and better than the £276m forecast by analysts.

Persimmon, which operates the Charles Church brand, reported a "mixed" performance in its North division, with Scotland performing well, while the North of England experienced a more subdued market.

Planning restrictions added to difficulties in the six months to the end of June, but the group said it was optimistic the market would pick up in the autumn.

Strong employment data and hopes that interest rates may be near their peak after five rate rises since last August should help prop up demand for property, according to Persimmon.

The group said it had already achieved 85 per cent of its full-year sales target and that forward sales for the remainder of the year were ahead of 2006, at £1.35bn.

Operating margins at the group improved from 18.9 per cent in the first half of last year to 20.8 per cent this year, thanks to strict control of building costs and cash management.