London-focused housebuilder Telford Homes has reported a 28% rise in pre-tax profit to £32.2 million after notching up record revenues of £245.6 million.
The company said its move into the private rented sector has yielded "exceptional capital returns".
Chief executive Jon Di-Stefano said: "There have been some recent and justifiable concerns over prime residential properties in London but this is a different market to that served by Telford Homes.
"The group is focused on desirable non-prime locations in London at a price point that continues to see strong demand."
Telford sold off two rental developments during the year, one to fund manager M&G and the other to housing association L&Q.
The company said it is growing in parts of London where the supply of new homes is "nowhere near meeting the demand from people who need a place to live".
The firm sold 548 homes overall over the year compared with 661 in 2015.