Chinese investors have waded into the capital’s buy-to-let market to snap up flats in Canary Wharf for up to £500,000 each three years ahead of completion, the head of London builder Telford Homes said today.
The influx of overseas cash has fattened margins and prompted Telford to flag up annual profits “significantly” ahead of expectations just halfway into its financial year ending next March, sending the shares up 26p, or 8%, to 335.25p.
Telford, the East London specialist which has already attracted cash from Hong Kong and Singapore, marketed its Canary Wharf flats scheme Horizons in Beijing and Shanghai this summer through Jones Lang LaSalle, bringing in Chinese investors in significant numbers for the first time. Chief executive Jon Di-Stefano, pictured above, said Telford had sold at least 20 of the 109 Horizons flats snapped up to buyers from China, which “could become a substantial market” in the future. Horizons, where flats range from £350,00 to £500,000, is not due for completion until 2016. “There is also an awful lot of pent-up investor demand in China for areas like Stratford following the Olympics,” he added.
Telford is fully sold for the current year without aid from the first part of the Help to Buy scheme, which offers Government-backed loans to boost deposits. Di-Stefano said: “As far as zones one and two go, I’m not sure that it is needed. Inner London is more expensive and there is a lot of tenant demand, but buy-to-let investors are excluded from Help to Buy. And if you are buying in London at that level, it is unlikely you would want to do it with a 95% mortgage.”
But national housebuilder Bellway today toasted Help to Buy as it posted a 34% rise in pre-tax profits to £140.9 million for the year to July, and lifted the dividend 50% to 30p. The number of homes sold by the firm last year rose 8.2% to 5652 but Bellway thinks it could almost double volume growth to 15% this year thanks to demand fuelled by Help to Buy and two new operating divisions. Chief executive Ted Ayres said the scheme “has given us the confidence to believe we can achieve those level of volumes this year”.
