The firm said: “Whilst we have seen an increase in the supply of skilled subcontractors over the past year, there remains an industry shortage in the UK, with increases in labour costs remaining the largest driver of overall build cost inflation.

“We are well placed with the necessary labour to meet our operational and quality requirements.

 “We continue to expect that overall build cost inflation for FY16 will be c. 3% to 4%.”

Barratt now has 90% of its building materials bought through a centralised procurement system on fixed costs for the rest of the year.

The firm added: “We are also seeking to increase efficiency through the use of timber frame on around 6% of our plots during FY16 and through the use of alternative off-site manufacturing options, including closed panel roof solutions.”

The comments came as Barratt unveiled half year results for the six months to December 31 2015 showing pre-tax profit up 40.3% to £295m on turnover up 19% to £1,875m.

Gross margins were up from 17.4% to 18.6% with a target for the end of next year of 20%.

Barratt confirmed “some slowing at the top end of the London market” but said 74% of its properties in the capital reserved last year cost £600,000 or below.

Chief Executive David Thomas said: “In line with our strategy, we have stepped up the number of completions in the first half and we did this in a disciplined way, both financially and operationally, without compromising on the quality of the homes we’re building.

“In the past five years we have increased our annual output by more than 53%, built more than 71,700 homes and approved the investment of over £4.4 billion in new land for housing.

“The market remains strong as a result of improved mortgage availability and Government support for first time buyers and we will continue to grow in a way that delivers for the needs of homebuyers and shareholders alike.”