Barratt is to guarantee to banks that it will underwrite any potential losses on certain homes in order to improve lenders’ confidence in the new homes market.

Writing in Building next week, Mark Clare, Barratt’s chief executive, will say the company will compensate any mortgage lender that suffers a loss as a result of Barratt’s failure to disclose sales incentives on new homes.

The initiative comes amid concerns from mortgage lenders that some housebuilders are hiding the true value of the homes they sell by offering incentives worth thousands of pounds. This can leave lenders exposed to a loss if the buyer defaults on the property.

Clare states that solicitors acting on Barratt sales will disclose all incentives, and commits to help banks sell repossessed homes.