THE UK's biggest retirement home builder, McCarthy & Stone, posted an 11 per cent rise in half-year profits today, at the top end of expectations, as growing numbers of pensioners looked for homes.

The firm, provider of two-thirds of Britain's retirement homes, said overall conditions were good for housebuilders.

Britain's housebuilders have enjoyed a bumper few years as cheap borrowing costs, low unemployment and a shortage of supply have fuelled a surge in property prices.

Most analysts think the market will slow as interest rates start to rise, but there has been little sign of this so far.

The firm posted pre-tax profits of £44.1m for the six months to February 29, up from £39.7m a year ago.

The group proposed an interim dividend of 4.8p, up 23 per cent. In early trading, McCarthy & Stone shares were at 572p, valuing the firm at £594.4m.