TORQUAY-BASED homebuilder Cavanna Homes has reported a third successive year of growth despite continued challenging trading conditions.

Figures recently published show that in 2011 the company produced a turnover of £30million on a total of 160 sales — an increase of 10 per cent on the previous year.

Open market sales rose by 30 per cent to 152 while social housing fell to just five per cent of total sales. This is because in 2010 Cavanna Homes' social housing division sold a record 51 plots as two purely social housing developments were completed.

Although the company has returned a robust set of figures and increased staff numbers to a pre-recession high of 79, it says the house housing market and the house building process as a whole remains challenging.

Marketing director Jonathan Cavanna said: "In recent years, since the start of the economic downturn, the output of the house-building industry has shrunk by a half, and although we are pleased to have achieved a promising set of results, it has been against a difficult background.

"Over the past 12 months, our focus has been on steadily growing our sales in the open market which has meant that we have had to keep our pricing competitive."

The availability of mortgages on terms people can afford has been one of the key factors holding back the housing market nationally but Cavanna Homes believes the Government's £400million kick-start to the building industry this summer, along with a pledge to underwrite 95 per cent mortgages on new homes, is 'encouraging'.

Mr Cavanna said: "This investment is very encouraging news because previous recessions, from the Great Depression of the 1930s onward, provide firm evidence of a link between house building and economic recovery.

"House building not only employs people in a variety of roles on site and in the office, but there are also additional local support services such as builders' merchants, architects, structural engineers, environmental consultants, solicitors, estate agents, mortgage brokers and even planning officers, which has the overall effect of raising the employment figure as well as significantly boosting the local economy."

The Home Builders' Federation estimates that for every new home built each year, one and a half full-time jobs are sustained directly within the industry with an additional three generated in the overall supply chain.

At the end of last year, Cavanna Homes won outline planning permission for major developments at Dawlish and Paignton and detailed planning consent for a second large development at Plymouth Airport, known as 504K.

All three housing projects will begin in 2012. Smaller projects at Charles Road, Kingsteignton, and Pebblestone at Seaton are also due to begin this year.

However, the company suffered a significant setback last year on the refusal of an application for new homes at Scotts Meadow, Torquay.

The company has appealed against the decision and it is going to public inquiry in March.