ONE of the south's biggest house builders today maintained a positive view on the property market as it unveiled another set of record annual results.

Bellway's forecast-beating 21.4 per cent rise in profits to £205.5m was the 13th improvement in a row for the group, which said its low selling prices - averaging £161,400 - had helped its performance.

It added that five interest rate hikes in the past year had helped return the housing market to more normal conditions.

Bellway, which has its regional base at Ringwood, currently has one major flats development in Southampton.

The Deanery, near the Chapel district has one-bedroom apartments selling from £129,000.

Bellway was also behind the controversial £5m regeneration of one of Southampton's then most run-down areas, St Mary's, seven years ago.

Group chairman Howard Dawe said: "We believe that if interest rates stay at around their current levels, which are still historically low, then we are confident that the market will be sustainable."

The group also forecast continued growth due to its strengthening land position and its increasing commitment to housing association work.

It welcomed the government's recent announcement of an extra £1.3 billion to be allocated to affordable housing, giving a total of £7.2 billion over the next three years.

With 6,610 homes sold in 2004 and a large portion of its target for this year already met, Newcastle-based Bellway said it was confident its successful track record would continue.

Much growth has come from more geographical coverage while it also has a wide range of properties and a prudent land-buying policy.