In a first quarter trading update Mark Clare, group chief executive said: “We have traded well over the period. Our strategy of securing higher margin land and bringing it into production as quickly as possible is delivering.

“The group is on track to report a significant improvement in profitability for both the half and full year.”

He added that completions and profits from joint venture sites in London would “increase significantly over the next 2 to 3 years”.

Britain’s biggest house builder said it expected to resume dividend payments at the end of its full year and remained on track to pay off its £400m debt by July 2015.

He added that overall underlying prices had remained stable during the period, with greater strength in London and the South East.

“Further changes in product mix are expected to deliver growth in private average selling price in the first half and full year 2013,” said Clare.

Average net private reservations per active site per week were stable at 0.54 in the last 18 weeks.

Overall forward sales were up 2% at £947m on the same time last year. Of this private forward sales were up 21% at £768m, while social housing bookings nearly halved.

Barratt reported greater interest in the NewBuy mortgage indemnity scheme during the Autumn selling season, with 9% of private reservations during the period supported by NewBuy.

The house builder said it would receive £35m in low-cost development finance in the full year from the Government’s Get Britain Building Scheme to kick start stalled developments.

Barratt will also receive its full tranche of Government FirstBuy funding ahead of the Spring selling season where it would be used to drive sales on older and impaired developments.

Clare said Barratt continued to secure land at attractive prices across the country with 29 sites approved in the period.

He estimated that half of full year completions were now expected to come from newer higher margin land.