Housebuilders claimed this week that the cost of new houses is rising at a much lower rate than the 30% inflation figure recently reported by the Halifax building society.
Countryside Properties chief executive Graham Cherry, speaking at the firm's annual results meeting, said newly built homes valued at less than 拢350,000 sold for 5-10% more than last year and the cost of more expensive houses had barely moved at all.

Cherry sought to calm fears of over-heating in the new homes market, saying the second-hand market might be fuelling inflation. He said: "Some people are asking how much home improvement boosting second-hand house prices is taken into account."

Bovis Homes chief executive Malcolm Harris also expressed scepticism about the Halifax figures. He told Bank of England officials overall house price inflation had been exaggerated because the cost of new homes had risen more slowly than those on the second-hand market.

At the results meeting, Countryside announced a pre-tax profit of 拢34.3m for the 12 months to 30 September, a rise of 13% on the same period last year. Turnover increased 13% to 拢456.1m.

The firm believes it has the capacity to build 22,700 homes, which have gained or are awaiting planning permission. It plans to withdraw from commercial-only schemes next year, because of an expected fall in demand for office space.