HOUSEBUILDER Barratt has seen its strongest spring selling period for five years, but the North-East housing market is struggling to show signs of joining the recovery.

Newcastle-based Barratt, like other UK housebuilders, has responded to a weak market and lack of mortgage finance by focusing its activities on areas such as London, where prices are relatively buoyant, and on more profitable houses rather than cheaper apartments.

The group said that 25 per cent more potential homebuyers reserved properties in the 18 weeks to May 6 compared with the same period last year. The company described overall underlying house prices as stable with London and Britain's more affluent South-East showing greatest robustness.

Barratt is working on 397 sites, which is up from 374 in the same period last year. The company expects to buy 10 thousand plots in the current financial year.

In its interim statement, Barratt said: "Whilst the economic outlook remains uncertain and the availability of mortgage finance continues to be a constraint, we expect the benefits of the various government initiatives to continue to provide support to the industry."

Barratt says there has been strong interest in the government's NewBuy scheme to help potential homebuyers.

About 70 customers have used the scheme to reserve homes since its launch on 12 March. The NewBuy scheme, under which the Government and builders guarantee mortgages, has seen lenders criticised for pricing the loans too steeply.

Average selling prices rose 5 per cent to £202,000 and the company expects to complete 600 more sales this year than projected, totalling 12,600 homes rather than 12,000. Last year it achieved about 11,000.

The strong sales figures allayed fears that demand for homes would drop off after a stamp duty holiday ended in March.

Its results came after the latest RICS UK Housing Market survey showed that the North-East residential property market continued to struggle in April as prices edged lower.

Across this region, 21 per cent more chartered surveyors reported falls rather than rises in house prices. Alongside this, expectations for future prices remained at a low level in April with a net balance of 30 per cent more respondents predicting further drops.