HOUSEBUILDER Barratt Developments said yesterday that orders had broken through the £1bn barrier, despite concerns about a housing market slowdown.

The Newcastle company said that although interest rate rises had moderated demand, it had enough orders and completions to secure 70 per cent of its full-year projection.

Barratt said at its annual meeting that lower price rises in the year ahead would improve affordability and benefit its sales performance.

Chairman Charles Toner said: "Despite negative media reporting, and the uncertainty this causes potential buyers, we are currently achieving sales levels sufficient for us to secure another year of progress."

He said low interest rates, good employment levels and supply shortages due to difficulties in the planning system were underpinning the market.

This meant that in the medium and longer term, overall demand would continue to exceed supply.

The Bank of England has kept interest rates unchanged at 4.75 per cent for the past three months, after five rises since last November showed signs of cooling the housing market.

The latest house price survey by the Nationwide Building Society showed subdued growth during September.

The slowdown helped reduce annual house price inflation in the UK to 17.8 per cent from 18.9 per cent the previous month - its lowest level since March this year.

Some economists have warned of a much sharper fall in prices during the next few years.

In the year to June 30, the group saw record results, with pre-tax profits rising 27 per cent to £367.7m and the full-year dividend increasing 25 per cent to 21.58p.