Housebuilder Bellway has revealed plans to sell 15% more homes in the current financial year as Government incentive schemes pump up demand and inflate its profits.
The Newcastle-based housebuilder said its growth in the north is now outstripping the south as the housing market recovery spreads to most parts of the country.
Its pre-tax profits rose by a third to £140.9 million in the year to the end of July, and Bellway said its order book is almost 50% bigger at £644 million as demand is lifted by the state's Help to Buy loan and guarantee scheme.
But it became the latest builder to warn on rising material and labour costs, after suffering shortages in recent months. R ival Crest Nicholson recently said squeezed supply is forcing it to import materials such as breeze blocks from Europe.
Bellway sold 5,652 homes during the year, up 8.2% on a year earlier.
It said sales volumes should rise another 15% this year to about 6,500 homes - a ssuming continued robust demand and no delays to construction. It has opened new divisions in Manchester and the Thames Valley to capture growth.
The builder pointed to recovering demand in the north, where completed sales rose by 12% to 2,652 and average prices increased 8% to £163,500. Home s ales in Scotland leapt by 23% to 414, while sales surged by 34% to 301 in Yorkshire.
It added demand remains robust in the south, with completions rising 5.2% to 3,000, and average prices edging up to about £219,000.
Chief executive Ted Ayres said: "The pleasing thing is we're starting to see a bit more recovery from our northern divisions.
"The London market is very strong and the south has been strong for a period of time but the thing is we are starting to see the recovery from the north."
The average price of a Bellway home rose 3.4% to about £193,000, helping lift group revenues almost 11% to £1.1 billion.
Shareholders will benefit from Bellway's improved trading with a 50% hike in its total divi to 30p per share, driving its shares up about 4%.
Its operating margin swelled to 13.6% from 11.4% a year earlier.
Housebuilders have been boosted by Government efforts to spur the housing market, with mortgage approvals hitting a five-and-a-half year high in August.
Help to Buy allows people to buy a home with a 5% loan scheme, and was recently extended to include a state guarantee on high-risk mortgages.
That helped propel house prices to a new high in August, with official figures today showing the average price across the UK has risen to £247,000 - surpassing a previous peak recorded in January 2008.
But Mr Ayres said while London prices have been about 5% stronger than it expected, it is seeing "no pricing bubble from the Bellway end".
Bellway's reservations surged 29% since the launch of Help to Buy in April, and it said they have remained above last year since the end of July.
Mr Ayres said extending Help to Buy to Wales and Scotland, plus the recent state guarantee, will help underpin demand.
But he added Bellway will face "inevitable cost pressures" on sub-contractor and material prices as the industry recovers.
Numis Securities analysts said: "The business is in a strong position to gain market share through strong volume growth which is supported by a conservative balance sheet, new regions and a strong forward order book position."