HOUSEBUILDER Barratt is aiming to kick start the housing market by launching a scheme that allows parents to borrow money to get their children on to the property ladder.

The initiative with Hitachi Capital (UK) PLC is designed to tackle the problems faced by young people who cannot secure mortgages without massive deposits.

The Newcastle builder announced the planned scheme in a trading update that showed its average selling prices jumped by around 6% to around £176,000 from July to December last year.

It completed 4,832 sales, down from 5,053 in the same period a year earlier, with almost three in 10 sales using shared equity schemes such as the Government’s HomeBuy Direct initiative.

Barratt expects sales to be around £875m for the six months, slightly up on last year’s £872.4m, but its operating margin has doubled to 5%.

Chief executive Mark Clare said: "The group has delivered a significant improvement in both average selling prices and operating margin even though sales volumes have been affected by difficult trading conditions.

"We are on course to make further progress in the second half as we open new higher margin sites and continue to be value and quality focused."

Barratt traded from 352 sites in the period and plans to have around 400 running by the end of its financial year in June. But the number of reservations were down slightly and the cancellation rate rose to 20.1% from 17.8%.

The company said that the "unusually low levels" of mortgage lending would continuing to be the main block on market growth in the short term.