Barratt Homes in more trouble

“Barratt has sold 172 luxury London new-build flats as rental homes, including an entire block at Nine Elms.

Here’s an unusual move by a housebuilder: Barratt Homes has bundled together 172 flats at various developments across London and sold them off as rental homes.

The housebuilder said it had sold the units to Henderson Park for £140.5m. The portfolio includes 29 units at Aldgate Place, a joint venture with British Land, 25 in Fulham Riverside and all 118 at its Nine Elms Point tower in Vauxhall, a joint venture with L&Q.

The deal is Henderson Park’s first foray into the private rented sector: Greystar will manage the homes.

David Thomas, Barratt’s chief executive, called the move an “excellent opportunity”.

“In particular the build and sale contract for an entire tower at our Nine Elms Point development enables us to deliver homes more quickly than we would otherwise.”

Back in January Barratt reported the number of sales it completed in London had fallen more than 56 per cent in the six months to the end of December, to 367 from 842 the year before.

The company said it had lowered prices and was offering bulk deals, like today’s, to shift homes in the capital.

However, last month the housebuilder reported an 8.8 per cent rise in pre-tax profits during the period, partly thanks to the fact completions outside the capital were at their highest level in nine years.

Meanwhile, figures published by Hometrack suggested house prices in the capital grew just 6.4 per cent in January, the lowest growth in four years.

At the time Richard Donnell, insight director at Hometrack, said: “When you consider that house prices in London are 85 per cent higher than they were in 2009, it is not surprising that the pace of increases is slowing toward a standstill as very high house price increases mean affordability is stretched.”