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Housebuilder Redrow today predicted a return to profit for the first time since 2007 as the recovery in the property market picks up pace.

The group, which achieved losses of £8.7m in the six months to December 31, is forecasting a surge in sales which will see it move out of the red in the second half of its year.

Flintshire-based Redrow is expecting to complete more than 2,500 house sales this year – up on the 2,113 reported in its last financial year.

It said average prices of private houses had increased year-on-year and against the first half, while activity in the land market had also seen a “noticeable increase”, according to Redrow.

However, the company said that despite a recent revival, the UK property market was not out of the woods yet.

Its comments come as property intelligence firm Hometrack reported a continued slowdown in momentum in the property market during April, with sellers outstripping buyers and prices ahead by just 0.2 per cent during the month, following increases of 0.3 per cent in each of the previous two months.

Redrow said: “We have been encouraged by sales activity since the start of the calendar year with sales rates per outlet comfortably ahead of the same period last year.

“Weekly visitor levels and cancellation rates have remained reasonably consistent throughout the period.”

It added: “Given the uncertainties surrounding the election, the economic environment and continued restrictions on mortgage availability, we expect the market to remain challenging throughout 2010.”

Redrow is hoping the launch of its New Heritage Collection of family homes will help drive sales. The new range has seen the group place traditional family housing back at the forefront of its offer.

Since the end of 2009, Redrow has secured or agreed terms on around 2,500 plots on 18 sites, largely for its New Heritage Collection.

But the firm said earlier this year that council red tape was leading to planning delays and had impacted on the launch of the range.

Shares in the group rose on news of the expected profits cheer, which signals the end of one of the toughest periods for the housebuilding sector.

Redrow posted its worst ever annual results in the year to June 2009, when it slumped into the red by £140.8m.

Founder Steve Morgan – who also owns Wolverhampton Wanderers – returned as executive chairman in March last year to help turn the business around.

In othr news, Hugh Osmond, the entrepreneur who built up Pizza Express and Punch Taverns, has confirmed his interest in a takeover of housebuilder Crest Nicholson.

Mr Osmond’s Horizon acquisition vehicle is in talks with debt-laden Crest, along with several other companies as it looks to complete a single deal.

The approach, which is thought to value Crest at around £350m, could result in the first big acquisition in the industry since the start of the recession.

Speculation that it could also spark a wave of further activity led to a rise in housebuilding shares. Horizon is flush with cash after raising more than £400m in a stock market listing earlier this year.

It tabled its proposal at a meeting of Crest’s 40 banks last week.

The developer’s main lender is Lloyds Banking Group, which took control of Crest last year through a debt-for-equity swap.

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