Operating margins across the business for the half-year to December 31, 2010 increased to 5% from 0.6% in the same period last time.

The company said: “We have continued to pursue further operational efficiencies designed to reduce our build costs and increase the effectiveness of our operations.

“We have maintained a firm control on direct costs despite upward price pressures on certain materials.

“There has been no increase in overheads in the period and, looking ahead, the Group is focused on lowering these costs further as it sees the benefits of investment in new systems coming through.

“Further progress on costs is also targeted from technical innovation, in particular the efficient delivery of low carbon housing.”

Pre-tax losses at the firm fell to £4.6m from £178.4m while Barratt agreed deals on land with room for more than 6,000 new homes during the period.

Work is expected to start on a further 100 sites this year with construction underway on 390 sites by June.

Group chief executive Mark Clare said: “By focusing on price not volume and improving the underlying efficiency of our business, we have achieved a significant improvement in our operating margin despite a challenging autumn selling season.

“2011 has started well with encouraging sales rates and stable underlying pricing. We expect to see further operating margin growth in our second half as we continue to optimise prices, reduce costs and open new higher margin sites from recently acquired land.

“However, the market remains fragile and longer term recovery continues to depend on greater availability of mortgage finance.”