UK builder Wilson Bowden has launched its range of more affordable housing, with prices starting at £65,000.
Demand for affordable housing is outstripping demand in key areas
At the same time, Wilson Bowden also reported a drop in annual profits, calling the housing market the most challenging for many years.
Pre-tax profit fell 14% to £216.4m in 2005 from £252.4m a year earlier. Sales declined to £1.23bn, compared with £1.28bn in the previous 12 months.
Despite the fall, the firm raised its full-year dividend by 22.4% to 46.5p.
A number of companies are looking to offer cheaper housing to meet a shortage in densely populated areas such as the south-east of England.
Wilson Bowden said on Wednesday that its i-Life range of homes would offer "an innovative approach to one- and two-bedroomed living".
The houses will range in size from 300 to 677 sq ft.
Planning approval already has been granted for 100 homes and building has started on plots in Balderton, Nottinghamshire, and Wootton, Northamptonshire.