THE GAMBLE taken by the developer Barratt on its controversial Dalston Square flats scheme has paid off.
Britain’s biggest housebuilder resisted the temptation to include the site with the sale of much of the property it held, its “land bank”, as the onset of recession in 2008 slashed the developer’s share price by more than 90 per cent.
Barratt gritted its teeth, ploughed on with the Dalston Square project and marketed it in Beijing, Hong Kong and other Asian cities. Banks again started offering buy-to-let loans.
Mark Clare, Barratt chief executive, said that investors were tempted by rental yields of up to 7 per cent. There had been “major interest in our schemes in Dalston and Lewisham”. Individuals were looking for the quality and security of new build.
The buy-to-let sector has helped Barratt to record its first annual profit in four years: £42.7 million, pre-tax in the year to June.
The third phase of Dalston Square flats is due for completion next summer and is still mostly unsold. Barratt says that lettings of £330 to £550 a week should return between 5 per cent and 7 per cent.
The controversy arose several years ago when Hackney council overrode local people’s wishes for the site. A campaign to save a Victorian theatre failed and it was demolished, as was the concept that 50 per cent of new accommodation in London should be affordable.
David Altheer 170911
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