Housebuilder Willmott Dixon plans to grow its social housing division from £105m to £180m by 2007

The move – which would equate to a 71% increase in turnover over three years – comes as other housebuilders are steeling themselves for a lean couple of years.

Last week Willmott Dixon poached Phil Green from rival housebuilder Countryside as its first head of business development and gave him responsibility for hitting the £180m target.

Chris Durkin, chief operating officer at Willmott Dixon Housing, said: “We are responding to the demand for housing growth that is out there as a result of the communities plan.”

The ODPM announced in last summer’s spending review that it planned to build an extra 10,000 affordable homes a year by April 2008. This is part of a target set in the communities plan to build 1.1 million private and social homes by 2016.

“There are no two ways about it – the private housing market has hardened up. But there are still good opportunities out there. You just have to be cautious about what you go for,” said Durkin.

He added that making the division so dependent on public sector spending was a concern but added that as social housebuilding was where the extra government spending was being targeted it was “a bit of a no-brainer really”.

Durkin said the arm, which only does social housing, was trying to diversify into private sector provision through its Widacre Homes division, which works in partnership with housing associations to build private homes.

Currently, Willmott Dixon generates 80% of its social housing work from just 10 housing associations. It plans to increase this number and has won work with Notting Hill Housing Group, William Sutton, Mosaic and Hanover Housing Group.

Turnover for the company as a whole to 31 December 2004 was £410m, up from £330m the previous year, and in May it announced record pre-tax profits of £10.1m, up more than 50%.