Housebuilder Crest Nicholson this week issued an upbeat trading update, despite negative speculation engulfing the sector.

The company said that it was expecting to announce record profits in line with expectations for the year to 31 October 2004.

It has sold 30% more houses and doubled the number of affordable homes sold to more than 700. Average sale prices fell from 拢239,000 to 拢210,000.

However, the board said: 鈥淐ustomers are now more cautious following a succession of interest rate rises and the rate of house price inflation has abated.鈥�

Peter Darby, finance director said: 鈥淎t the moment we are obviously in the normal quiet period this side of Christmas and we鈥檒l see what happens in the new year.鈥�

He said that it was too early to talk about the future of house prices but that the shortage of housing supply, identified in the Barker report, left Crest Nicholson 鈥済lad to be where we are鈥�.

He added there was no change in the situation between the company and Gerald Ronson, its biggest shareholder. Ronson鈥檚 company Heron International first bought shares last August and has continued to build up its stake to 22.07%.

Speculation has mounted that Ronson is poised to make a bid for the company, but he has declined to discuss it with Crest鈥檚 board.