The company unveiled a pre-tax profit before exceptional items of £42.7m for the year to June 30 2011 compared to a £33m loss last time as turnover stayed flat at £2bn.

The improvement came as build costs were cut by 1.4% per square foot during the year and average selling prices rose by 2.3% to £178,500.

Chief executive Mark Clare said: “Our supply contracts for materials continue to be reviewed and renegotiated as appropriate and we purchase an increasingly significant proportion of our materials centrally.

“We continue to review our supply chain to create efficiencies by introducing new suppliers and altering build specifications where appropriate.

“Standard house-type costs are benchmarked across the group every six months to ensure the lowest cost is achieved whilst maintaining the quality of our homes.

“Overall, we have seen total housebuilding costs (including infrastructure) reduce by 1.4% per square foot in the year.

“Going forward, it is likely that some pressure will continue to be felt as raw material prices rise due to underlying commodity price increases.”

Operating margins also increased during the year to 8% from 5.9% last time.

Barratt has spent £981.3m on new land since it started buying sites again in in mid-2009 and has now built-up a land bank of 22,000 plots.

The firm expects to be working on 400 active sites this year.