Barratt hails resurgence in buy-to-let investment
Housebuilder Barratt has said that the number of people investing in buy-to-let in London has soared in recent months.
The demand for new houses from investors in buy-to-let properties, particularly in the capital, helped the company record a 50 per cent rise in operating profits to £135 million in the first six months of the year.
Barratt said that sales to investors, mostly in the UK, rose about 25 per cent on the same period in 2010, the Financial Times reports.
This surge has been down to rapidly increasing tenant demand for rented accommodation due to the difficulties in securing finance to purchase their own homes.
As a result, Barratt is targeting buy-to-let investors with rental yields in London as high as seven or eight per cent.
Suburbs and towns in the commuter belt with good links in the capital have also seen a large amount of buy-to-let investment.
"We've seen major interest in our schemes in Dalston and Lewisham, as well as commutable areas such as Basingstoke and Woking," Mark Clare, group chief executive, told the Evening Standard.
"It's mainly individuals fed up with the returns they're getting from banks and looking for the quality and security of new build."
Barratt also said that it had shifted its focus away from flats to higher value family homes.
It follows recent figures from buy-to-let mortgage lender Paragon which said it has seen a significant interest in the number of landlords looking to buy family homes to put on the rental market.
A survey by the firm found that of those landlords planning to purchase new properties during the third quarter of the year, 41 per cent are looking to invest in semi-detached houses and 22 per cent are looking to buy a detached property.
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