housebuilder Barratt Developments said it expected house prices to increase much less rapidly in the next 12 months as it reported record full-year results.

The company, which is based in Newcastle, said the market had moderated in recent months.

It said it expected house selling prices would rise in line with incomes at about four per cent in 2004/2005.

Barratt said the slower growth would help affordability and a more stable market would provide a firm foundation for growth.

It said demand for new homes continued to be supported by historically low interest rates, good employment levels and housing supply constraints caused by planning delays.

Barratt said its regional markets, including London and the South-East, remained sound and produced improved performances.

Pre-tax profits in the year to June 30 were up 27 per cent at £367.7m, while the full-year dividend increased 25 per cent to 21.58p.

Chairman Charles Toner said the "excellent all-round performance" resulted in the group's 12th year of consistent growth.

"Interest rate rises have helped moderate the market, ensuring that it becomes more stable and sufficient for us to achieve our goals.

''We are well-positioned to continue our strategy of steady organic growth and look to the future with confidence."

Barratt said it completed more homes in total and more on brownfield sites than any other housebuilder for the second consecutive year.

UK unit sales for the year increased by five per cent to 14,021, more than any other housebuilder, at an average selling price of £166,000 - a rise of nine per cent.

The group has a total land bank of 56,355 plots, representing four years' supply at current volumes.