Grainger reports strong rental growth and occupancy levels as demand for housing continues to build

Grainger said 2023 will be a year of record investment for the company as it delivers 1,640 new, purpose-built, energy-efficient rental homes.

Commenting on outlook, the company said: “Based on our continuing strong rental growth, underpinned by demand for private rented housing, and our significant progress in investing in and delivering new rental homes, we are confident of continuing our strong operational performance.”

Helen Gordon, the chief executive of Grainger, said: “Building on last year’s record performance, Grainger has continued to deliver strong performance against all key operational metrics as demand for private rented housing in the UK has continued to grow further, coupled with low levels of supply.

"We have delivered a strong operational performance during the first four months of our financial year since 1 October 2022.

“Whilst keeping a very close eye on overall customer affordability levels, like-for-like rental growth has accelerated to 6.1 per cent from 5.5 per cent in H2 (the second half) 2022, closely correlated to wage inflation, compared to 3.2 per cent for the same period last year. Our PRS portfolio is effectively fully occupied at 98.7 per cent.

“Our programme of sales activity has proved resilient to date despite the uncertain outlook in the housing sales market, due to a lower reliance on mortgage purchases and first-time buyers. Sales of vacant homes from our regulated tenancy portfolio, as well as asset recycling across our PRS, regulated tenancy and development portfolios, have performed well, generating £48.1m of total proceeds, ahead of the same period last year (£21.1m proceeds).”

Sales prices achieved from vacant sales were on average 1.2 per cent below September vacant possession values, outperforming the market and reflecting the more resilient nature of these sales, Ms Gordon added.

She continued: “Our £1.8bn pipeline of new, purpose-built, energy-efficient rental homes will see us deliver 1,640 new build-to-rent homes across seven cities in England and Wales in 2023, a year of record delivery and investment for Grainger.

“Our build-to-rent partnership with Transport for London continues to progress exceptionally well. Through our joint venture, we are in the process of drawing down the land from TfL for four of the schemes, c.1,240 homes, all of which have full planning consent.”

Grainger said that sales from its regulated tenancy portfolio have historically held up well during previous downturns, proving a high degree of liquidity. It added: “Given the nature of the properties

we sell, we have a lower reliance on mortgage purchases and first-time buyers and therefore are less affected by these softer aspects of the market, and our regulated tenancy portfolio has an inbuilt buffer

because of the portfolio’s valuation, which is valued at 17 per cent below vacant possession value.”