High-end housebuilder Cala has been considering a £250m (€314.6m) sale to private equity and has hired Rothschild to test appetite for the Edinburgh business. 

The reported decision to explore its options comes amid a hesitant recovery in the building sector, which has taken a coshing in the downturn as the housing market stalled. 

While confidence remains subdued, an uptick in construction output of 2.2 per cent in July and a smaller contraction in the second quarter than first expected show the sector may be on a slow recovery path. 

Cala reported a rise in year-end profits from £2m to £11.4m earlier this month, as it built 666 homes in the 12 months to 30 June – a 24 per cent year-on-year increase. 

The rebound comes after a tough phase that saw Lloyds Banking Group up its stake in the housebuilder via a debt-for-equity swap that left the bank with a 32 per cent share.