Buy-to-let investor is back as Barratt returns to profit

The British buy-to-let investor is back from the dead, according to the chief executive of housebuilder Barratt Developments.

Foreign money has been flooding into the capital's housing market, but the housebuilder has also seen a revival of domestic interest in flats in London and the South-East commuter belt in the first half of the year.

Mark Clare said lenders were moving back into buy-to-let loans and investors were tempted by rental returns of up to 7%.

"We've seen major interest in our schemes in Dalston and Lewisham, as well as commutable areas such as Basingstoke and Woking," he said. "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 - the country's biggest housebuilder - has turned its first annual profit in four years, with pre-tax profits of £42.7 million in the year to June, reversing a £33 million loss last year.

Rival builder Galliford Try also benefited from strong housing in the south, with a 34% rise in profits as it rapidly expands its housing business to break into the UK's top five builders.

Galliford - which is building 450 apartments for the Olympic village - cheered investors with a 28% rise in the dividend, sending the shares up 4%.