Grainger set for record year in build-to-rent completions
- Grainger expects to complete construction of more than 1,600 rental homes this year
- Founded in 1912, the FTSE 250 firm builds American-style housing complexes
- Rising mortgage costs have significantly increased demand for rental housing
Housebuilder Grainger expects to complete a record number of new rental properties in 2023 amid growing demand for rental homes in the UK.
Helen Gordon, chief executive of Britain’s largest listed property owner, said the group hopes to finish building more than 1,600 new rental homes this year.
The Newcastle-based company has already completed five new housing projects across England, expanding its total estate to more than 10,000 residences.
Market conditions: Rising mortgage costs following 14 successive interest rate hikes by the Bank of England have significantly increased demand for rental housing
Gordon said the newly opened properties were supplying “one of the strongest occupational markets we have seen”.
Demand for rental housing has soared across Britain, and the cost of renting has also soared beyond the reach of many.
Compounding relatively weak stocks, rising interest rates have left many without places to rent, while many rental home owners are leaving the sector due to changes in energy efficiency regulations and strict planning that delay the construction of new developments.
Average advertised rents have risen to their highest levels ever recorded, reaching £2,627 per month in London and £1,278 per month outside the UK capital between July and September, according to online property portal Rightmove.
Grainger revealed that its rental prices grew by 7.7 per cent on a like-for-like basis during the 12 months ending September 2023, up from 6.8 per cent in the half-year.
For the private rental sector, the equivalent annual figure was 8 per cent, with rents for new tenancies rising at a faster rate than renewals.
Gordon said: “Current leasing across our newly opened schemes is outpacing subscription and we continue to drive an increase in rental income across our national portfolio.”
“However, we remain conscious of protecting our customers’ rental affordability and therefore continue to ensure rental growth across our portfolio moves in line with wage inflation.”
Similarly, Unite Students boss Richard Smith said on Wednesday that the need for new student accommodation “is the highest we have seen for several years”, particularly as HMO landlords are leaving the sector in droves.
“The private rental sector is in decline and there is a shortage of supply amid growing numbers of students,” he said.
Grainger also announced that it had achieved £194 million in sales during 2023, with £70 million as regulated sales vacancies.
Founded in 1912, Grainger builds American-style housing complexes where tenants not only live but also access a wide range of other services, such as gyms, concierges, gardens or co-working spaces.
It has approximately 6,000 more homes in the pipeline, which is part of plans to double revenue from operating activities over the next three years.
Grainger Stock They were up 3.4 per cent to £2.35 in early Thursday afternoon, making them one of the top ten risers on the FTSE 250 index.