The housebuilder has reported a loss before tax and after costs of £592.4m, down from a profit of £194.6m for 2007.
Exceptional costs came to £512.4m including £494.9m in impairment charges.
Significant discounting has sent Barratt’s average selling price fall by £17,300 to £160,700 for 2008, from £178,000 the previous year.
But the company has made inroads into reducing its net debt.
It has cut its level of net debt by £315.7m since December 31 2007 to £1.4bn, compared to £1.7bn in 2007.
Mark Clare, group chief executive of Barratt Developments, says: “This remains an intensely difficult market with little forward visibility.”
Clare says there have been “some signs of increased activity” but adds: “There will be no recovery in the housing market until the availability of mortgage finance improves.
“So we are continuing to offer customers every possible assistance to move house, ranging from shared equity products to part exchange on their current home.”