HOUSEBUILDER Persimmon moved to allay fears over the affordability of new homes as it prepared to announce another set of record results.

The group, which builds more than 12,000 homes a year, said the ten per cent rise in its average selling price so far this year - to £170,000 - was below the level reported in surveys and showed the sector remained competitive.

Updating the market ahead of half-year results, Persimmon, based in York, said it was on course to beat market expectations and set its highest profits figure for any six month period.

Previously, analysts had been expecting underlying profits of £199.6m, up from £151.7m seen a year earlier.

The full-year figure is forecast at £425.2m, compared with £352.5m last time.

Persimmon also said it had a record order book with total sales for this year at 10,400, generating sales of £1.8bn. This includes 860 units for its Charles Church housing business.

The recent strength in forward sales means Persimmon is braced for a quieter summer, although it said that ten per cent more outlets than a year ago, coupled with the usual seasonal upturn in the autumn, would ensure a strong year.

It said: "We therefore remain well positioned and are confident of achieving our planned growth targets."

Pointing to the affordability of its new homes, Persimmon said it continued to sell a significant number of new properties for less than £150,000.

The company said its landbank had increased to about 60,000 plots, helped by the acquisition of larger sites such as those recently announced in Birmingham and Colchester.