House builder Bovis Homes made record pre-tax profits of £160.1 million last year, up 20% thanks to rising house prices and low interest rates.

The developer increased its dividend to shareholders by 14% to 40p a share as it sold 3,934 homes, its highest ever number of annual completions and an increase of 8% on 2014.

The New Ash Green-based company had revenues of £946.5 million, up 17%, with an average sale price of £231,600 per home, up 7%.

It had also made 2,003 forward sales at the end of 2015, up 17% on the same time a year earlier, and predicted it would sell between 5,000 and 6,000 homes annually over the next few years.

The firm, which has developments across the country, made an 18.3% return on its investments in the year, up from 16.2%.

It had 19,814 plots in its land bank at the end of the year, up from 18,062, and £30 million in the bank, up from £5 million in 2014.

Chief executive David Ritchie said: “Assuming market conditions remain stable we are confident in our ability to improve return on capital employed further in 2016.

“While it has been a time of operational challenge with fast moving market conditions, we are delivering our strategic growth plan and have evolved our management and business structure at the start of 2016 to support further growth.”

“Assuming market conditions remain stable we are confident in our ability to improve return on capital employed further in 2016..." - David Ritchie, Bovis Homes

Operating profit for the year increased 19% to £163.5 million, giving it a margin of 17.3%, up marginally on the previous year.

Mr Ritchie said demand for new homes remains strong, supported by a an active mortgage market and interest rates which have stood at 0.5% since March 2009.

He said councils are delivering more planning consents, which he said had vindicated the company’s earlier investment in strategic land.

The business has secured or is in the final stages of gaining planning consent for eight “major strategic sites” across the country, including plans it has submitted to build 400 homes on land next to Coldharbour Road in Northfleet.

Mr Ritchie said: “The level of new build homes being supplied continues to be below Government targets.

“As a result, we believe a good opportunity remains for well capitalised house builders to invest in land to increase housing supply.

“The strong sales position brought forward from 2015 combined with the strong pipeline of new sites expected to commence trading in the next few months provides a solid platform from which to expect further growth in 2016.”