One of the UK's largest homebuilders is on a high this week with news that Redrow Plc has reported a better than expected annual pre-tax profit, thanks to a 10% rise in house prices.

However, it was a mixed message as the Ewloe-based firm also warned the outlook for the property market was challenging.

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Redrow posted a pre-tax profit of £25.3m in the 12 months to the end of June, compared with £700,000 for the same period last year.

Redrow said the improvements were driven by strong sales of its New Heritage Collection, a range of two to four-bedroom houses launched in February 2010.

These homes made up 41% of total sales in the second half of the year for the firm.

Redrow's pre-tax profit of £700,000 last year came a year after the company made a pre-tax loss of £44.2m.

(BMcC)