Britain's biggest housebuilder, Barratt Developments, has pointed to better advance sales and more home completions over the coming year although it opted to scrap plans for a special dividend payout after annual profit slumped.
The builder of homes in England, Scotland and Wales said it had begun its new financial year with "cautious optimism".
The sector also got a lift after mortgage lender Nationwide said UK house prices had leapt to hit an all-time high last month.
Britain's housing market has picked up pace after coming to a virtual standstill from late March, with tax breaks for home purchases and a trend towards suburban living caused by the pandemic spurring home sales.
"Although uncertainties remain, all of our sites are operational, we are seeing very strong consumer demand and our robust financial position means we enter the new financial year with cautious optimism," Barratt's chief executive David Thomas said.
Barratt's total forward sales as on August 23 stood at 15,660 homes with a value of £3.71 billion, compared with 13,064 homes last year.
The company said buyers were looking for homes with more space indoors and outdoors as a result of the pandemic which has seen many people forced to work from home.
Barratt praised the UK government's stamp duty holiday scheme as a boost to the industry, but said that it saw signs that many buyers were struggling with tighter lending conditions as banks worry about loan risks.
"It is important that lenders and the government consider what further options are available to help potential first time buyers who want to purchase their own home," Barratt said.
The company's pretax profit fell 45.9% to £491.8m in the year ended June 30. It incurred costs of £74.3m related to the Covid-19 pandemic.
Barratt's move to scrap the special dividend due to be paid in November of next year was in contrast with rival Persimmon, which reinstated a payout last month after an "excellent start" to the second half of the year.
