(Bloomberg) -- Barratt Developments Plc has entered into a joint venture with Lloyds Banking Group and Homes England to deliver thousands of UK homes.
The partnership will act as a master developer for multiple large scale, residential-led development from 1,000 to more than 10,000 homes along with community facilities and employment uses. Potential building opportunities will include large brownfield developments as well as “new garden village style” communities, according to a statement Monday.
It will initially be backed by combined equity funding of up to £150 million ($197 million) provided equally by Barratt, Lloyds and Homes England — the government body responsible for housebuilding. The new venture will be called MADE Partnership and aims to “unlock and scale the capital required to bring larger sites into production,” according to the statement.
“We do not expect the partnership to deliver any legal completions until 2028/29 at the earliest,” said Anthony Codling, housing analyst at RBC Capital Markets. This “highlights the complexities and challenges of finding, preparing and taking large sites through the planning process,” he added.
Barratt shares rose as much as 1.1% in early London trading.
The government laid out proposals to boost development this summer, promising to restore mandatory local housebuilding targets that were ditched by the previous Conservative administration. While planning reforms will take time to implement, UK lenders are already preparing for an increase in development finance, if the plans come to fruition.
Barratt — which is in the process of buying rival Redrow Plc for £2.5 billion — said last week it is expecting to ramp up new homebuilding following the overhaul of the planning system by the UK’s new Labour government. It said there were signs of improvement in recent trading, with net private reservation rates in July and August at 0.58, up from 0.42 during 2024.
Still, the number of new homes completed in England in the first quarter of the year fell to the lowest since the first Covid lockdown in 2020, reflecting developer caution in the face of higher interest rates, according to the Office for National Statistics.
(Updates with an analyst comment in the fourth paragraph and Barratt share price move in the fifth paragraph.)
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