Shares in Redrow were down on the FTSE 250 in afternoon trading despite the group saying it had returned to profit in the half year ended 31 December 2010.
Revenue in the period increased from £187.2 million in the same period in the previous year to £216.1 million.
Pre-tax profit in the period was £8.5 million. In the previous year the group reported a first half pre-tax loss of £8.7 million.
The group said that the number of legal completions had risen from 1,266 to 1,312. The average price of sold homes also rose from £147,300 to £170,500.
Net debt was reduced slightly by the company from £49.3 million to £51.5 million.
Steve Morgan, Chairman of Redrow, said, "Redrow continued to make good progress in the first half of the financial year, against the backdrop of a housing market overshadowed by economic uncertainties, tax rises and government cutbacks.
"In spite of the challenging conditions, Redrow"s decision to return to our traditional values with the introduction of the New Heritage Collection proved to be a great success for the business. Redrow has been transformed over the last two years. The New Heritage Collection is proving to be an aspirational product for our customers and it has undoubtedly played a major part in repositioning the Redrow brand and lifting the Group"s margins.
"While it is still too early to call the spring market the second half has started encouragingly with reservations during the first 6 weeks comfortably ahead of the same period last year. These figures must be treated with a degree of caution however as they undoubtedly include some 'catch up' from the December freeze. Looking ahead, house prices have been stable for some considerable time now and we do not share the pessimism of some commentators that there will be a major fall in house prices during the coming year.
"Given the improved quality of our land bank, the roll out of the New Heritage Collection and the unquestionable housing shortage, I feel that Redrow is in good shape to continue to make progress."
By 14:15 shares in Redrow were down 2.03 per cent on the FTSE 250 to 130.30 pence per share.