Persimmon - the UK's largest housebuilder - has seen a much stronger start to the year than 12 months ago after chalking up record profits in a "demanding" 2005.
Customers tempted by lower-priced properties and strong forward orders helped the firm, which is the parent company of Wolverhampton-based Persimmon Homes West Midlands, build a 5.9 per cent rise in pretax profits to £495.4 million.
Its sales increased by seven per cent to £2,286 billion as it sold 12,636 homes - two per cent more than 2004 - even though potential purchasers displayed a lack of confidence over house price stability.
In the Midlands it sold 485 properties at an average price of £150,000 last year, adding the market was beginning to pick up.
In the first eight weeks of this year it had seen a 14 per cent rise in reservations from 79 to 90.
Maureen Haywood, deputy managing director for Persimmon Homes West Midlands, said: "We have started 2006 in a much stronger position than 12 months ago with definite signs that the market is improving.
"There is clear evidence that all properties are selling much quicker than they were last year, visitor levels across our developments are on the up and there's an increasing number of first time buyers coming forward which is extremely encouraging.
"As I don't foresee any drastic change to the interest rate, I expect this is a trend that will continue."
Its developments in the Midlands include Cape Hill brewery site in Smethwick which will see almost 1,000 new properties built.
Ms Haywood said the new Mitchell's Brook development to the north of the site had proved particularly successful with more than 200 people visiting the marketing suites and two thirds of the properties being sold in a matter of hours.
Nationally Persimmon, which last month completed the acquisition of Cheltenham-based Westbury for £643 million, saw its average selling price climb five per cent to £180,892.
Bosses said they were now detecting an increase in confidence among purchasers and the "ability and desire" to buy a new home since the turn of the year with good levels if interest in its show homes.
So far this year, Persimmon sold around 7,000 properties - including the first contribution from Westbury - worth around £1.25 billion with an average price of £178,000.
In the north last year, there was a slight drop in properties sold, compensated for by a five per cent hike in average selling prices to £162,737 as it targeted the mid to lower end of the market.
A shift towards smaller homes in the south meant average prices crept up by only one per cent even though the number of completions rose 3.2 per cent to 6,388.
Increases in building material prices were kept down thanks to deals with its suppliers, the firm said.