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June 30 (Reuters) - Barratt Developments on Friday said it had agreed to sell 604 homes to Lloyds' private rental subsidiary Citra Living for 168.4 million pounds ($212.57 million) in cash, as Britain's largest housebuilder looks to diversify revenue.
About 500 of the homes will be transferred to Citra's ownership by June 2024, while the remaining homes will be transferred the following year, Barratt said.
The sale comes as the UK housing sector braces for a slower recovery due to persistent interest rate hikes which are set to hurt demand.
The Bank of England
raised interest rates
by a larger-than-expected half a percentage point to 5% last week.
"The single-family dwelling segment of the private rental sector continues to grow strongly and presents an opportunity for us to both diversify our revenues against the current challenging market backdrop and develop communities which encompass all forms of housing tenure," Barratt CEO David Thomas said in a statement.
Britain's biggest mortgage lender Lloyds launched its private rental business, Citra Living, in 2021 in a bid to find new revenue sources.
"Our goal at Citra is to bring much needed high quality homes to the UK rental market ... Our partnership with Barratt helps us achieve that goal," Citra Managing Director Andy Hutchinson said in a statement on Friday.
Shares in Barratt were up by about 0.7% in morning trade.
