HOUSEbuilder Bellway confirmed last night that it is on course to make record profits, after achieving more than three-quarters of its target annual sales in only six months.

Interim results from the Newcastle company showed that, in the six months to January 31, sales of new homes reached 2,930, a like-for-like increase of seven per cent.

Bellway's policy of forward selling meant the group had already secured 86 per cent of its sales target of 7,000 homes by July, the end of its financial year.

Chief executive John Watson said: "We feel there is still strong demand for the right-priced product, bearing in mind that the market has weakened compared to 12 months ago.

"It is harder than it was last year, but if our market level is maintained, we would hope to achieve our target of 7,000 homes."

Bellway has specialised in the lower to middle-range homes market. Its average house price rose from £156,900 to £165,000 compared to a year ago, but remains one of the lowest in the industry.

Mr Watson said: "We don't anticipate that price going up at all in the coming six months, or even in the next financial year."

The group also does a lot of work on regeneration sites and for housing associations.

With Deputy Prime Minister John Prescott planning to build hundreds of thousands of affordable homes through his Northern Way project, Bellway is well-placed to pick much of the work.

"I am anxious to get a slice of that," said Mr Watson.

"We are working hard, talking to various authorities about getting involved.

"We have been in that market for a lot of years and have a good track record in terms of delivery."

This will be the ninth year in succession the group has enjoyed record sales. It said profits were likely to be slightly ahead of the 18.5 per cent margin achieved in the six months to January last year.

The forward order book stands at £560m, compared to £542m this time last year.

Profits last year rose 21.4 per cent to £205.5m. Analysts expect the group to make up to £220m this year.