- Granger reported a 6.1% increase in like-for-like rent in the four months to January.
- FTSE 250 has £1.8bn to build around 7,000 additional rental homes.
- Demand for rental property in the UK is growing amid rising mortgage costs
Developer Grainger welcomed a strong start to the fiscal year amid increased demand for private rental housing in the UK.
The Newcastle-based company, which is the largest private landlord in the UK, recorded a comparable rent increase of 6.1% in the four months ended January, nearly double the year-over-year period.
Its portfolio of private sector rental properties reached a record occupancy rate of 98.7%, up 1.7 percentage points from February 2022, as client inquiries remained at an extremely high level.
Strong results: Grainger reported like-for-like rent growth of 6.1% in the four months ended January, nearly double the year-over-year increase.
Having shown the best annual results, the group said it expects to maintain growth momentum in 2023.
It is investing a record £300 million to build 1,640 rental homes in seven English and Welsh cities.
This is part of a £1.8bn project to provide approximately 7,000 additional rental homes, of which over 3,600 are fully funded, to its existing portfolio of 10,000 properties.
Under joint venture with Transport for London in 2019, the company intends to build more than 3,000 homes at eight sites in the capital, some of them in existing metro stations.
Grainger chief executive Helen Gordon said the amalgamation “continues to develop exceptionally well” with four construction schemes for about 1,240 new homes in Southall, Nine Elms, Arnos Grove and Montford Place in Kennington having received full planning approval.
Demand for rental properties in the UK is skyrocketing on rising mortgage costs driven by the Bank of England’s successive rate hikes and former Prime Minister Liz Truss’ disastrous mini-budget.
At the same time, the supply of new homes for rent is being stifled by tough planning laws and a large number of homeowners exiting the market following new regulations and tax changes in recent years.
Landlords can no longer deduct expenses such as mortgage interest from their tax bill and must pay a 3 percent stamp duty surcharge when purchasing a second home.
According to the latest figures from insurance agency HomeLet, these factors have pushed the median rent up to a mind-boggling £1,172 a month and nearly £2,000 a month in London.
“Based on continued strong rent growth, bolstered by demand for private rental housing, and our significant progress in investing and delivering new rental homes, we are confident we will continue our strong operating performance,” the company said.
Grainger, founded shortly before World War I, offers American-style housing estates where tenants can enjoy other services ranging from concierge services to gyms, gardens and movie theaters.
Granger shares were up 1.2% at 260.4p just before the close of trading on Wednesday, although they still fell 13% over the past 12 months.
Credit: www.thisismoney.co.uk /