HOUSEBUILDER Barratt Developments said there were signs buyer confidence had returned to the market following a lift in sales completions and profits.

The Newcastle company said that despite "testing market conditions" during the six months to December 31, the group saw a two per cent rise in legal completions to 7,003 homes, at an average selling price of £165,000, similar to last year.

Private completions were one per cent lower at 5,569, at an increased selling price of about £180,000, and social housing completions increased by 14 per cent, at a maintained selling price of about £106,000.

It said recent sales had been encouraging and, although below last year's record levels, they remained above the group's historic averages and put it on target to increase sales.

As a consequence, interim results on March 29 are expected to show an improvement in pre-tax profits.

The group said it employed a wide range of incentives, as well as strict controls on building costs, to secure satisfactory operating margins.

The business renegotiated supply contracts and offered first-time buyers deals on deposits, stamp duty and fixtures and fittings to encourages sales, said chief executive David Pretty.

In a trading update, the company said: ''Overall, 2005 was challenging, with the market adjusting from its earlier overheated levels to more normal levels of activity.''

Barratt increased its land bank from 59,443 plots for flats and houses in 2004, to 63,000 by December 31, which equates to 4.4 years'-worth of building projects.

Mr Pretty said: "We feel we had a good result from our teams.

"We competed well because of our desire to achieve growth, both in homes completed and pre-tax profits, and we believe we are well-placed for future growth.''

He said the market appeared steady and stable and predicted a modest rise in house prices of between one per cent and three per cent over the year, which he said would give first-time buyers a better opportunity to get on the housing ladder.

Published: 24/01/2006