The housebuilder warned last month that it had seen a “marked slowdown” in sales in the final months of last year as spiralling mortgage rates and the uncertain outlook deterred potential buyers, especially those looking to get on to the housing ladder.

In response to these conditions, the company said it had significantly reduced land approvals and paused the recruitment of new employees.

Announcing its interim results for the six months ending 31 December 2022, chief executive David Thomas described the improvement in recent weeks as “pleasing” but confirmed that his company would not be building as many homes this year as it had previously forecast.

He said: “Encouragingly, we have seen better trading activity in January relative to the last quarter of 2022, but we also recognise that it is very early days. We will need to see continued momentum over the coming months before we can be confident that these challenging trading conditions are easing.”

Mr Thomas added: “The group is in a very strong position. We have substantial net cash and a solid forward sales position. This provides a robust platform and creates flexibility to continue to respond to market conditions as they evolve throughout the coming year.

“Our full year out-turn remains dependent on how the market evolves through the Spring selling season. However, based on the improved reservation activity we have experienced since the start of calendar 2023, we expect to deliver total home completions of between 16,500 to 17,000, including c. 750 completions from our joint ventures.

“With our excellent land bank and highly experienced operational teams throughout our business, we remain well placed to continue to deliver much-needed, high quality and energy-efficient, sustainable homes across the country.”

Douglas McLeod, regional managing director for Barratt Developments in Scotland, said: “We have delivered a strong operating performance for the six months to 31 December 2022. This was possible because of our significant forward order book at 30 June 2022 and the tremendous efforts of our employees, sub-contractors and supply chain partners.

“However, the economic backdrop has clearly been challenging and consumer confidence weakened significantly during the half, which meant we saw lower reservation rates for future sales – particularly in the second quarter. Whilst we have seen some early signs of improvement in current trading during January, we will need to see continued momentum over the coming months before we can be confident that these challenging trading conditions are easing.

“Our business remains fundamentally strong, both operationally and financially, with an experienced leadership team, a strong net cash position and a resilient and flexible business model. We are well-placed to navigate the challenges ahead and are focused on driving revenue whilst taking a decisive and disciplined approach to costs. As always, our priority is delivering excellent quality and service for our customers.”

Barratt’s operational performance in the first half delivered 6.9% growth in total home completions 3 to 8,626 with adjusted profit before tax up 15.9% at £521.5m and reported profit before tax also advancing 15.9% to £501.5m.

Net private reservations per active outlet per average week from 1 January 2023 through to 29 January 2023 were 0.49, 45.6% below the 0.90 in the equivalent period in 2022, reflecting the more tentative demand seen in the calendar year to date, but an uplift on the level of activity seen from Barratt’s AGM announcement through to 31 December 2022.

Forward sales 3 as at 29 January 2023 were 10,854 homes (30 January 2022: 15,736) at a value of £2,665.0m (30 January 2022: £4,109.7m) with 8,719 homes of these total forward sales either exchanged or contracted (30 January 2022: 11,362 exchanged or contracted).