Barratt has become the latest housebuilder to benefit from Britain's housing boom, saying it expects annual profits to more than double.
The country's biggest housebuilder by volume predicted it would make a pretax profit of about £390m in the year to 30 June, better than City forecasts.
It sold 14,838 homes during the year, 8.6% more than in the previous year. The average price climbed 13% to £220,000, reflecting a shift towards building larger family homes as well as the strong housing market.
Mark Clare, chief executive, said Barratt's house sales were at their highest level for six years and its order book was strong, with forward sales up 45% to £1.2bn.
"There is an awful lot of people who haven't been able to buy for some time who are now very active in the market," he said. "The recovery has extended beyond London and the south-east, and we are seeing increased confidence and activity in all the regional markets," he said. "This is a strong sign of a real economic recovery."
Clare said the housing recovery started at the end of 2012 and really gathered steam when the government's Help to Buy programme was launched in April 2013, whereupon housebuilders stepped up construction. The scheme is still boosting the market, Barratt and rival Taylor Wimpey said.
Other housebuilders have also reported buoyant figures in recent days. Taylor Wimpey enjoyed a strong first half. Bovis Homes posted a record number of first-half house sales, up 54% to 1,487, and Galliford Try says it is on track to make record full-year profits at the top end of analysts' expectations of £92.8m to £95.2m.
Clare welcomed the Bank of England's recent moves to rein in mortgage lending, saying they were sensible. The Bank will not allow lenders to extend more than 15% of their mortgages to customers needing to borrow four-and-a-half times their income, but stopped short of imposing more draconian measures to cool the housing market. The Bank has calculated that the impact will not be immediate and the measures will only start to bite if house prices rise more than 20% between now and the first quarter of 2017. The latest measures came after stricter regulations on home loans took effect in April under the mortgage market review.
"We want long-term stability," Clare said. "Ideal for us would be house prices running in line with wage inflation."
He was sanguine about the impact of an interest rate hike, which could come towards the end of 2014 or early next year. The Bank has signalled that rates will rise gradually and settle at around 3% in a few years' time, a lower level than before the financial crisis. This would translate into mortgage rates of 5-6%, Clare said – "the long-term average which is a perfectly reasonable position in terms of affordability".
In any case, "the big focus is on supply," he added. "It's not about demand – there's plenty of demand out there."
Barratt has paid down its debts and now has £70m of cash sitting in the bank.