Bellway PLC (LON:BWY) said it expects its average house to cost more than £300,000 by the end of the year as buoyant demand drives prices higher.
A house cost £293,000 on average in 2020 and this house price inflation was keeping margins steady as costs rise across the industry, it said.
In a trading update, Bellway said house price rises are particularly benefiting selected sites, especially in localities where demand is particularly strong.
Sales increased to 239 reservations per week over the period between 1 February to 6 June 2021 compared with 158 per week a year earlier and 244 before the pandemic.
The forward order had risen by 20.5% to a value of £1.9bn or 6,763 homes, it added, which is higher than in both of the past two years.
Completions for the full year are expected to be around 10,000 homes with fewer in the second half compared to the first.
Net cash at the period end was £408mln.
Jason Honeyman, chief executive, added: "Demand for our high-quality new homes continues to be strong and customer confidence throughout the wider housing market is resilient.
"We have continued our front-footed approach to land acquisition, making a record investment in new sites, thereby enabling us to grow sales outlets and meet the ongoing demand for new homes in the years ahead."