Upmarket home builder Cala Group said in a trading update it remained on course to deliver another record year of revenues and profits in 2017, despite its average selling price falling to £504,000.

Edinburgh-based Cala said it contracted for 17 new sites in the six months to December 31 with a potential gross development value of £640 million and the strong trading continued in early weeks of 2017 with the group now 80% sold for the full year.

Cala CEO Alan Brown said: “The first half of the new financial year has seen the group deliver a very strong performance and we are on course to deliver another record year of units, revenues and profits in what would be our fifth consecutive year of record growth.

“Encouragingly, the positive first half performance has continued into the second half with positive trading momentum since the start of the calendar year.

“In line with our ambitious growth plans, we are certainly doing our bit to increase the supply of family homes across the UK.

“Our focus in 2017 remains on scaling up and optimising the operational efficiency of our eight regional businesses, to deliver sustainable growth and an annual capacity of up to 2,500 homes within four years.

“The fundamentals underpinning the UK housing market are supportive, the land market remains robust and the mortgage environment continues to be positive.

“Following the release of the Housing White Paper, we were pleased to see that the Government recognises the need to further reform the planning system and we particularly welcome their plans to ensure that planning departments are better resourced via increased planning fees.

“Planning departments have faced severe cuts in recent years which has in turn impacted developers’ ability to get on site and start building so any measures that will see local authorities boost their planning resources are a definite step in the right direction.”