Grainger pledges ‘responsible’ rent hikes as UK’s largest private landlord profits from strong rental market
- It reported like-for-like rental growth of 4.5% in the 11 months to end of August
- It was helped by a ‘buoyant’ rental market and ‘record’ levels of occupancy
- It pledged to take a ‘responsible approach’ to rent increases amid crisis
Grainger has hailed a ‘strong’ performance ahead of its full-year results as it continues to benefit from rising demand and property rents.
Britain’s largest private landlord reported like-for-like rental growth of 4.5 per cent in the 11 months to the end of August, accelerating to 5.3 per cent in the last five months of the period.
It said it was helped by a ‘buoyant’ rental market and ‘record’ levels of demand and occupancy, but it told investors on Monday it will take a ‘responsible approach’ to rent increases given the cost of living crisis.
In demand: Grainger said enquiries about its built-to-rent apartments from prospective customers remained at record levels in the past 11 months
Rents are increasing on the back of strong demand and weak supply, and are forecast to keep on rising in the coming year, adding to the financial squeeze on households.
Last month, Rightmove reported that the average asking rent outside London is 19 per cent higher than two years ago, up from £949 per calendar month to a record of £1,126.
Despite the rising cost of renting, Grainger said enquiries from prospective customers remained at record levels.
Chief executive Helen Gordon said momentum was continuing to accelerate across the business, with new lets growing 5.4 per cent and renewals up 3.9 per cent.
The FTSE 250-listed company, which was founded more than a century ago in Newcastle, is among a relatively new group of landlords offering American-style complexes where residents pay rent and get other services thrown in.
That could be anything from concierges, cinema rooms and gardens to broadband, gyms and any repairs that need doing.
With a portfolio of around 10,000 homes, Grainger said it had a pipeline of another 10,000 ‘build-to-rent’ blocks under construction worth £2.4billion.
In June, the group agreed to forward fund and buy the build-to-rent element of a Bristol development for £128million.
The ‘Redcliff Quarter’ in Bristol comprises 374 private rental homes, as well as 94 affordable homes and six commercial units.
Grainger said it was providing free broadband and complimentary gyms in its newest-built homes as well as practical advice for tenants on how to reduce their energy consumption.
It has also given all its staff, except for the senior executive team, a £1,000 one-off cost of living payment.
Gordon added: ‘Despite the buoyant rental market, we are very mindful of the financial challenges facing many individuals.
‘We are therefore taking a responsible approach to rental increases, ensuring affordability for our customers remains a central consideration and balancing rent increases with retention.’
Grainger shares rose 1.4 per cent to 271p in afternoon trading on Monday.