Housebuilder Grainger expects to complete a record number of new rental properties in 2023 amid soaring demand for homes-to-let in the UK.
Helen Gordon, the chief executive of Britain’s biggest listed landlord, said the group expects to finish building more than 1,600 new build-to-rent houses this year.
The Newcastle-based business has already completed five new housing schemes across England, thereby expanding its total estate to over 10,000 residences.
Market conditions: A surge in mortgage costs following 14 successive interest rate hikes by the Bank of England has driven up demand significantly for rental homes
Gordon said the newly-launched properties were being supplied ‘into one of the strongest occupational markets we have seen.’
Demand for homes to rent has soared across Britain, with the cost of renting also spiralling beyond the means of many.
Compounding relatively weak stock, rising interest rates have priced many out of places to rent, while many buy-to-let landlords are leaving the sector due to changes to energy efficiency regulations and tight planning laws delaying the construction of new developments.
Average advertised rents have risen to their highest levels ever, hitting £2,627 per month in London and £1,278 per month outside the UK capital between July and September, according to online real estate portal Rightmove.
Grainger revealed its rental prices grew by 7.7 per cent on a like-for-like basis for the 12 months ending September 2023, up from 6.8 per cent at the half-year point.
For the private rented sector, the equivalent annual figure was 8 per cent, with rents on new lets expanding at a faster pace than renewals.
Gordon said: ‘Current leasing at our newly-opened schemes is exceeding underwriting, and we continue to drive a step up in rental income across our national portfolio.
‘However, we remain mindful of protecting our customers’ rental affordability and, therefore, continue to ensure that rental growth across our portfolio moves broadly in line with wage inflation.’
Similarly, Unite Students boss Richard Smith said on Wednesday that the need for new student homes ‘is the greatest we have seen for several years’, particularly as HMO landlords are quitting the sector in droves.
‘The private rental sector is in retreat and a supply crunch is building amid growing student numbers,’ he said.
Grainger also announced it had achieved £194million in sales during 2023, with £70million being vacant regulated sales.
Founded in 1912, Grainger builds American-style housing complexes where tenants not only live but also access a wide array of other services, such as fitness studios, concierges, gardens or co-working spaces.
It has approximately 6,000 further homes in its pipeline, which forms part of plans to double earnings from operational activities over the coming three years.
Grainger shares were 3.4 per cent up at £2.35 on early Thursday afternoon, making them one of the top ten risers on the FTSE 250 Index.
