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darwin

Barratt Plans Move Into Private Rented Sector

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Barratt Developments plans to move in the private rental sector.

No one's going to buy their overpriced crap so they've got to hawk it out somehow, I guess.

From Assetz http://news.assetz.co.uk/articles/5574.html

Barratt planning rental build projects in London | 15th February 2011
Housebuilder Barratt Developments is looking into the possibility of renting out properties in London in a bid to combat the effects of a dwindling mortgage market, the Financial Times has reported.
The company built 11,000 homes last year, including 700 in the capital.
The firm's bosses are considering making many of its existing properties available for rent in London and building more homes with the intention of putting them on the rental market as it looks to take advantage of potential house buyers' concerns over committing to a mortgage.
"The rental market in London is pretty healthy at the moment, as a lot of people want to move home but cannot get mortgages and so have to rent," a person familiar with the group told the Financial Times.
"The situation in the housing market is far from straightforward at the moment and all housebuilders are having to look at new ways of doing things," the person added.
Barratt said it was considering a number of different options but it claimed that it would need to find an appropriate partner before any venture into private rental goes ahead.

Inside Housing Magazine have this story also: link

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There was some guy from Redrow on Fivelive this morning saying that it was the lack of mortgages and not prices stopping people buying.

The Fivelive financial guy said that with Tier One the banks weren't going to lend vast sums on mortgages as it meant they need bigger reserves.

I just felt that it was going over the guy's head.

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So in a few years they'll either be competant landlords and keep building to provide more houses to rent out... Or will be bad landlord who'll try to sell the properties.

At least they'll have to take a hit on them not being shiny new builds anymore.

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So in a few years they'll either be competant landlords and keep building to provide more houses to rent out... Or will be bad landlord who'll try to sell the properties.

At least they'll have to take a hit on them not being shiny new builds anymore.

Hmm, I wonder which one it will be? :rolleyes:

edited to add: With the 2012 Olympics on the horizon there'll probably be some kind of kickback available. When you add it together, no hit at all, most likely.

Edited by darwin

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Around six years ago the total build cost of a barratts three bed with garage was £41K . It was traditional build and the price covered all site costs. I was talking to a well known local developer yesterday building next door to a new David Wilson (Barratts) estate that has just started. He said that the build cost per house unit was now only £26K which included all the land and infrastructure. Yes thats right, £26K . The costs have dropped dramatically because its all timber framed building Systems. I spoke with him for around 15 minutes. In that time all the timber roof frames of one house and been craned up and fitted in place as we watched. This week over six houses have been constructed by a handfull of operatives. Prices start at £199K. Thats a tidy profit of £173K for each rabbit hutch.

Barratts are already in the rented sector. Most affordable housing built as part of the requirement of any development are only leased by Barratts to housing associations for a 40 year period . 40 years is the anticipated life of a new barrattls house so it all works out nicely . Housng associations and Barratts seem happy with this arrangement

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Around six years ago the total build cost of a barratts three bed with garage was £41K . It was traditional build and the price covered all site costs. I was talking to a well known local developer yesterday building next door to a new David Wilson (Barratts) estate that has just started. He said that the build cost per house unit was now only £26K which included all the land and infrastructure. Yes thats right, £26K . The costs have dropped dramatically because its all timber framed building Systems. I spoke with him for around 15 minutes. In that time all the timber roof frames of one house and been craned up and fitted in place as we watched. This week over six houses have been constructed by a handfull of operatives. Prices start at £199K. Thats a tidy profit of £173K for each rabbit hutch.

Still, they need quite a lot of 200k rabbit hutches to be sold to pay for the amount the have lost on land hording.

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It's terrible news for BTL landlords.

If a Barratt house now costs £26k to build they can afford to rent it out for less than a BTL landlord, who has paid much more for their house. Private landlords will be priced out of renting their properties. QUICK - get your BTL's on the market.

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It's terrible news for BTL landlords.

If a Barratt house now costs £26k to build they can afford to rent it out for less than a BTL landlord, who has paid much more for their house. Private landlords will be priced out of renting their properties. QUICK - get your BTL's on the market.

an institution like Barratts may make a better landlord than previous armies of amateur Rigsbys. If they get good at it over the coming years they may keep it up. I wonder if they will establish a REIT?

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Around six years ago the total build cost of a barratts three bed with garage was £41K . It was traditional build and the price covered all site costs. I was talking to a well known local developer yesterday building next door to a new David Wilson (Barratts) estate that has just started. He said that the build cost per house unit was now only £26K which included all the land and infrastructure. Yes thats right, £26K . The costs have dropped dramatically because its all timber framed building Systems. I spoke with him for around 15 minutes. In that time all the timber roof frames of one house and been craned up and fitted in place as we watched. This week over six houses have been constructed by a handfull of operatives. Prices start at £199K. Thats a tidy profit of £173K for each rabbit hutch.

Barratts are already in the rented sector. Most affordable housing built as part of the requirement of any development are only leased by Barratts to housing associations for a 40 year period . 40 years is the anticipated life of a new barrattls house so it all works out nicely . Housng associations and Barratts seem happy with this arrangement

That's amazing - so they could quite easily drop their prices.

Well, more fool them, then.

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an institution like Barratts may make a better landlord than previous armies of amateur Rigsbys. If they get good at it over the coming years they may keep it up. I wonder if they will establish a REIT?

This sort of thing could be the answer for those looking ofr longer term stable rentals.

Mates used to live in a block of flats in Edinburgh that was owned by ING IIRC. The rents here were very long term. Basically stay as long as you want.

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BTL landlords used to look at a new Barratt development chuckling "Another load of houses people cannot afford to buy"

Now it might be "Oh ****! more competition to crowd me out of the market"

Perhaps Barratts and other housebuilders should be forced to rent out 50% of the houses they build at 30% of the national pension rate per week?

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Perhaps Barratts will find out, for better or worse, what long-term ownership of one of their creations is like !!!

Too true, lol. They'll probably end up costing more in maintenance than the actual build! :lol:

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