Barratt Developments has raised its profits forecasts and joined rivals in soothing fears over the impact of higher interest rates.

City analysts expect the UK's largest housebuilder to report profits of about £360m - £10m higher than previously forecast - after confirming a successful end to its financial year.

Barratt, based in Newcastle, completed 14,000 properties in the UK during the year to June 30. It said domestic demand remained sound, with rate rises helping the market to return to more sustainable levels.

In a trading update, the company said: "We have produced another record year.

"Forward sales stand at record levels and all planning permissions are in place to achieve a further year of growth."

The company's 12th consecutive year of profits growth comes after it achieved average UK selling prices of about £165,000 in the UK - up eight per cent on last year. It achieved pre-tax profits of £288.7m last year.