Persimmon posted a 9.8% rise in first-half pretax profit on Tuesday and as the U.K. housebuilder said it expected the U.K. housing market to continue to grow despite recent rises in interest rates.
Britain's largest housebuilder by market value said first-half sales were 1.514 billion pounds ($3.01 billion) while margins had improved to over 20% from 19% a year ago.
Chairman John White told CNBC demand for new homes has helped to offset the impact of higher rates on the market.
"We're seeing moderate price growth, but it's sustainable," White told "Squawk Box Europe."
White also sought to ease investors' fears over U.S. subprime mortgage contagion, saying lending in the U.K. appears to have been more disciplined over the past years.
Persimmon said its current forward sales for the second half were around 1.35 billion pounds, roughly 85% of its target for the year.
It also raised its interim dividend by 34% to 18.5 pence and promised to raise its full year dividend by 10% or more.
Shares of Persimmon fell 1%, despite the positive results.