Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to the newest version of your browser.

Your browser appears to have cookies disabled. For the best experience of Construction News, please enable cookies in your browser.

Welcome to the Construction News site. As we have relaunched, you will have to sign in once now and agree for us to use cookies, so you won't need to log in each time you visit our site.
Learn more

Barratt confirms shared equity sell off plans

Housebuilder Barratt has confirmed it is in talks to sell off parts of its £170 million shared equity loan portfolio.

In a statement released to the stock market this morning it said it had noted recent “press speculation around its portfolio of shared equity loans”.

The statement said:  “Barratt confirms that it is in the early stages of looking at options to monetise part of its interest in this portfolio. There is no certainty that any transaction will be concluded.”

The move comes after a Financial Times report claimed the company had entered talks with investors to sell the first tranche of its shared equity loans.

It claimed the company was looking to dispose of part of its £170m shared equity mortgage book which has been amassed since the start of the recession.

Such a move could prove significant for the housebuilding market as a whole as it would be the first sign of the return of mortgage security products.

Thus far housebuilders have avoided selling their loan books as investors are thought to have demanded the debt be traded at too large a discount.

One real estate banker told the FT:  “Barratt will have to take a haircut on the loans. But, if it is not too big, others will follow and it will make a nice little sideline for the industry,” said one real estate banker.

“The difficulty will be for those housebuilders which haven’t written down their shared equity enough and have to take losses to sell it,” the banker added.

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.