THE UK's largest housebuilder, Persimmon, has reported record profits despite what it described as a "demanding" year.

Customers tempted by lower-priced properties and strong orders helped the York company to a 5.9 per cent rise in pre-tax profits to £495.4m.

It sold 12,636 homes - two per cent more than 2004 - even though potential purchasers displayed a lack of confidence over house price stability.

Persimmon, which last month completed the acquisition of Cheltenham's Westbury for £643m, saw its average selling price climb five per cent to £180,892.

Bosses said they were detecting an increase in confidence among purchasers and the ability and desire to buy a new home since the turn of the year, with good levels if interest in its show homes,

So far this year, Persimmon sold about 7,000 properties - including the first contribution from Westbury - worth about £1.25bn, with an average price of £178,000.

In the North last year, there was a slight drop in properties sold, compensated for by a five per cent rise in average selling prices to £162,737 as it targeted the mid to lower end of the market.

Neil Foster, managing director of Persimmon Homes Teesside, said: "This is another set of strong results, particularly given indifferent market conditions through 2005, and clearly emphasises our position as the number one national housebuilder

"In the Teesside region, we have seen an upturn in visitor levels since the turn of the year, which will hopefully be sustained through 2006. This, coupled with the opening of new developments in Durham City, Redcar, Consett, Hartlepool and Stockton, will hopefully guarantee another successful year."