CREST Nicholson is reducing its exposure at the top end of the housing market as prices come under pressure.
The group said oversupply has overheated the luxury apartment market.
Chief executive John Callcutt said the group would continue to focus on the middle market and mixed-use developments.
He said: 'Prices at the top end, particularly in London, are certainly weakening. There are also pressures because of constraints in the south-east with less land being released and brownfield sites still taking time coming through.'
In the year to October 31, 2002, Crest lifted pre-tax profits to £63 million from £50.5 million in 2001.
Turnover rose 19 per cent to £696 million as Crest sold 1,899 homes at an average price of £225,100. The firm hopes to be selling 2,600 houses by 2004.
A management buyout of its construction business Pearce for £9.2 million was approved by shareholders last week.