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    Shared equity scheme designed to boost the housing market is “working”

    The company says it has already agreed deals on 100 homes using the FirstBuy scheme despite it only launching two weeks ago.

    FirstBuy involves the Government and a housebuilder taking an equity stake in new homes, meaning first-time buyers can acquire a property with smaller deposits.

    The scheme is designed to increases activity in the housing market, where sales volumes are at historic lows due to a lack of mortgage availability and the economic downturn hurting consumer confidence.

    Barratt has been awarded £25m from the scheme for homes in England and expects to sell up to 1,400 properties over the next 12 to 15 months through FirstBuy.

    Mark Clare, chief executive, said: “The FirstBuy sales show there are buyers out there. We have been working hard on this.”

    The Barratt boss made the comment as the company posted a trading update for the year ending June 30.

    The housebuilder said its exposure to the stronger London market, which is the second largest in the sector behind Berkeley, will allow it to return to profit for the year. Mr Clare said profits before tax and exceptional items would be roughly £40m.

    Barratt sold 11,171 homes in the year, compared to 11,377 last year. However, the average private selling price ended the year up 5pc compared to 2010 at £204,000.

    This growth has been achieved through the housebuilder focusing on larger, family homes and the success of the business in London, which accounts for 15pc of revenues.

    Mr Clare added: “Whilst we have seen some recovery following the difficult Autumn selling season, trading conditions in some areas outside London and the South East remain challenging. In London, we continue to benefit from a strong market position, with our developments selling well.

    “FirstBuy is a timely boost and is already proving popular, but market recovery cannot be sustained without improved lending conditions. Our focus remains on improving margin rather than driving volumes.”

    Daily Telegraph 14.07.2011