Housebuilder Redrow has announced that its low-cost home plan will be coming to Birmingham after its launch yesterday.
The " Debut", range of homes are targeted at firsttime buyers and will cost from £49,995 for a one bedroomed apartment and £110,000 for a two-storey, two-bedroomed house.
The first site to be developed will be in Rugby, but Redrow's regional chairman John Tutte said the company was looking to develop across the UK and had already identified a site near Birmingham.
Mr Tutte said: "At the moment we are still in negotiations regarding the Birmingham site. However, we believe our houses have enormous potential and tap into a market that has been largely ignored - first-time buyers."
The firm has a target for all ten of its operating regions to build 100 Debut homes a year.
The announcement coincided with Redrow's interim results which saw a 22 per cent rise in pretax profits in the first half to December 31 to £69.1 million.
The Flintshire-based group, which has more than 1,300 staff, also said it had sold 2,111 homes in the six months to December 2004 - a six per cent increase on the same period last year - at an average selling price of £175,000, up 16 per cent on the previous year's £152,700.
As a result of the increases, turnover in the homes business lifted by 22 per cent to £373.1 million against £304.8 million, with an operating margin, in line with last year, of 19.8 per cent.
Overall, first-half operating profits in the homes division increased by 24 per cent to a record £73.8 million.
The company hopes that their new Debut range will help to add value to shareholders by keeping development costs low and reducing compulsory contributions to councils.
Mr Tutte said: "There are several ways that we make Debut housing affordable."
"The steel frames we have used have been designed to make houses far quicker and easier to construct and we're developing shared and public gardens to maximise on space."
Redrow will also retain a ten per cent stake in its houses as a fixed, interest free sum repayable by the homeowner over ten years.
The group hopes that by reducing the deposit required to purchase, they will entice first time buyers into the market.
Mr Tutte also identified reductions in payments, known as '106 agreements' made to the local council as a significant saving.
"Under the Government's eco- homes standard, our houses are rated excellent.
"The houses will have good insulation, low energy fittings and will be heated by shared gas boilers.
"Due to these features, combined with the low cost of the properties, we have negotiated substantial reductions in 106 payments to Rugby council."
The firm increased its interim dividend by almost 20 per cent to 3.6p from 3p.
Shares in Redrow closed down 1.5p at 408.5p.
