(Bloomberg) -- Britain’s housing market may be showing tentative signs of improvement after a brutal 2022.

Barratt Developments Plc, one of the UK’s biggest homebuilders, struck a cautiously optimistic tone on Wednesday, citing an uptick in home sales in January. The comments stand in contrast with warnings made just a month earlier about the risk of a slowdown.

“We have seen some early signs of improvement in current trading during January,” Chief Executive Officer David Thomas said in the statement. Still, “we will need to see continued momentum over the coming months before we can be confident that these challenging trading conditions are easing,” he added.

The sharp increase in the cost of mortgage borrowing has triggered a slump in demand for new homes. Barratt, Taylor Wimpey Plc and Persimmon Plc — a trio which collectively built more than 45,000 homes last year — all warned last month that demand for new houses had tumbled and hinted at more disruption for the market in 2023.

At the end of the year, forecasters and economists concluded house prices would tumble in 2023, to mark the first annual decline in a decade, as rising borrowing costs and inflation erode consumers’ spending power. 

The average number of weekly private sales — the so-called net private reservation rate — at Barratt’s sites rose to 0.49 in January, according to a statement Wednesday. While that’s down from 0.9 a year earlier, it’s up from the previous half-year trading period. 

Barratt said it expected land approvals in 2023 to be ‘minimal’ because of current market conditions and the strength of its land bank. The homebuilder said 22 previously approved sites will no longer proceed, resulting in a net cancellation of six sites in the six months through December. 

“Barratt Developments’ strong land bank bolsters its resilience,” BI analyst Iwona Hovenko wrote in a report. “Though the challenging economic backdrop, high rates and inflation may prove a heavy test,” she added.

Read more: Pricey Mortgages Wreak Havoc on Britain’s Top Homebuilders

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