THE housing market is at its strongest in five years according to Britain's biggest housebuilder.

Barratt Developments, which was founded by the late North-East property tycoon Sir Lawrie Barratt, said it expects to post a major improvement in annual profits.

The sector is benefitting from being the focus of Government attempts to get the economy moving, most recently through the Help to Buy package of shared equity funding and mortgage guarantees unveiled in the Budget.

In a trading update Barrett reported consumer demand and mortgage supply were improving steadily thanks to the £80bn scheme, with around 400 people using Help to Buy to reserve properties since its launch on April 1.

For the year so far as a whole, sales rates were up by 9.7 per cent to 0.62 sales a week at each of its selling sites. 

But the pace of demand means the developer fears it could face a skills shortage in the future. Barratt said it plans to take on 600 graduates and apprentices over the next three years to head off any problems.

Barratt is the latest housebuilder to report a significant increase in reservation rates since the launch of Help to Buy. The update came after housebuilder Taylor Wimpey on Monday said full-year profits would be at the upper end of its expectations and last month, York-based Persimmon hailed a good start to the year. 

The sector is also receiving a boost this year from the Government's Funding for Lending Scheme, launched last summer with the aim of encouraging banks to lend, which has supported mortgage availability.

Chancellor George Osborne has pledged to provide and guarantee billions of pounds in loans to home buyers in a bid to boost home ownership and construction. 

"Help to Buy has seen a strong start and we are investing in land and bringing it through planning to meet increasing consumer demand," Barratt chief executive Mark Clare said in a statement.

Many house buyers have found it tough to stump up the large deposits needed to buy homes and the financial crisis has made banks reluctant to hand out mortgages. Barratt said the present backdrop, in terms of consumer demand and mortgage supply, was the most positive it had seen for five years.

The favourable conditions have encouraged the developer to increase land purchases, with 17,000 plots expected to be bought in the 2013 financial year, compared with 12,085 in 2012.

The company said its private forward sales, excluding joint ventures, at May 5 was 28.5 per cent up on the same point last year at £1.01bn and it expected to reduced net debt to £100m from £168m by June 30.