Barratt getting set to enter rental sector

Thursday 17th February 2011

One of the country’s largest housebuilders is poised to set up a style of private landlord business.

Barratt, which has a turnover of more than £2bn, is aiming to provide around 1,000 new private rented sector homes in London a year.

While a number of developers have turned short-term landlords after failing to sell new units, Barratt is looking at the rental market long term.

The company is looking at two possible models for entering the sector. In one scenario, Barratt would sell a portion of a new development to a joint venture private landlord, retaining a minority stake.

In the second option, Barratt would sell a bulk proportion of units to an investor at the outset.

Mark Clare, chief executive of Barratt, told Inside Housing magazine: “Landlords could charge a premium for the stock if we get this right.

“It is a big opportunity for us to be able to say to customers that we have options for them. A professional rented model is going to very soon gain some traction.”

The Barratt plans follow a deal last September between developer Berkeley Homes and the Homes and Communities Agency which created a private rental fund. The HCA is investing £45.6m into the Berkeley scheme in return for a 20% stake. Berkeley plans to use the fund to purchase 555 homes it will build in the next two years.

A spokesman for Barratt denied that a move into the private rented sector was imminent, and relied on a joint venture partner emerging.