THE price of new homes is set to continue to rise over the rest of the year, despite the slowdown in the housing market, a regionally-based housebuilder announced yesterday.

Persimmon plc, parent company of Tyneside's Persimmon Homes (North East) Ltd, revealed the average selling price of a new home rose in the last six months to £103,770, from £94,685 at the same point last year.

The York-based firm confirmed it expected the upward trend in house prices to continue, as it posted its fifth set of record half-year profits in a row.

Chief executive John White said the slowdown in the South- East had been distorting the market for the rest of the country, which had been seeing slow but steady growth.

"Undoubtedly there has been a slowing, if not a levelling out, particularly in the South-East, but things outside that area have not been too different," he said.

Profits before tax for the six months to June 30 were £48.5m, against £35.7m the time before.

Turnover rose to £362m, from £325m at the same point last year.

The number of completions in the period rose only marginally, to 3,483 from 3,354, because of increased planning constraints.

In July the company announced the market for new homes was set to keep booming when reporting a record level of forward sales.

The company revealed that forward sales for the second half of 2000 were already at £255m, with an expected strong demand continuing.

Over the six months to June 30 Persimmon completed a similar number of homes to the same period in 1999.

But it said it increased average selling prices and its operating profit margins.

The Government's PPG3 planning directive, designed to encourage more use of brown field sites for development, was creating a considerable shortage of land for development, according to Persimmon's chairman, Duncan Davidson.

"Persimmon has again achieved a strong record of growth in sales and profits," he said.

"This is the result of sound management and dedication to quality - not just in design and construction but in all our activities.

"The Government's new planning directive is creating a considerable shortage of land for development, but our land bank of 34,629 plots puts us in a strong position to withstand these new planning pressures."

The company said sales were slightly slower in July, but have been more encouraging during August.

The interim dividend to shareholders was set at 3.9p, up 11.4 per cent on last time's 3.5p.

lThe company also yesterday launched a loyalty card linked with building supplies company Jewson.

The card called Homeplus offers housebuyers discounts on a future Persimmon house when they buy goods from Jewson.