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UK housing market normalising as profits jump

London - Britain's largest housebuilder Barratt Developments predicted a return to "more normal" trends in Britain's housing market as it posted more than doubled yearly profit and said it would return £400m to shareholders.

The group posted profit before tax of £390.6m for the 12 months to June 30, in line with analyst expectations, and said the average selling price of a property was up 12.9% to £241 600.

It plans to return £400m to shareholders over three years, with the first payment of £100m to take place in November 2015.

The builder, Britain's biggest homebuilder by volume, also foresaw a cooling of the market as the initial stimulus of the British government's "Help to Buy" scheme, introduced in April 2013 to enable buyers with small deposits to get a mortgage, begins to fade.

CEO Mark Clare told Reuters the company expects to build 15 700 homes in the 12 months to June 2015, compared with 14 800 in 2014 and 13 600 in 2013, a marginally slower rate of increase.

"That's a good, solid, continued growth rate," he said.

Several housebuilders in recent weeks have posted buoyant results, including Bovis Homes which recorded a 150% profit leap in first-half earnings.

But a series of surveys have indicated the market is beginning to cool, with one showing the momentum behind the London property boom is fading and another indicating house prices are stagnating due to tougher lending rules.

An expected rise in Britain's record low 0.5% base lending rate by early next year could also dampen housing demand, with many Britons' mortgage repayments fluctuating according to the base rate.

Barratt said it would pay a full-year dividend of 10.3 pence per share, more than four times last year's payout of 2.5p.

Its shares were up 2.5p at 369.6p by 07:42 GMT.

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