Grainger welcomes housing white paper, makes good start to 2017

Residential landlord Grainger has welcomed the government’s recent white paper on housing, while it has made a good start to 2017 with progress on lettings and rental growth.

On Tuesday, the government published a white paper with measures to build more affordable homes such as councils having to plan for their own needs and to give local authorities the ability pressure property developers to start building on land that they owned. It was also a pivot to help renters more, with the already announced ban on lettings fees.

Chief executive Helen Gordon said that the company welcomes the white paper as it “represents a significant shift in focus, rebalancing government housing policy toward a broader, more holistic approach, which moves away from primarily focusing on home ownership and recognises that the UK needs homes to rent, as well as homes to buy, to solve the housing crisis”.

She said that this should underpin Grainger's strategy to invest £850m into the private rented sector by 2020.

Meanwhile, Gordon said that the company had made a good start to the year with positive progress on lettings and rental growth as it develops its secured private rented sector build to rent schemes, a market where the company's sees strong potential for growth.

“We are seeing the benefits of the actions taken to reduce our operational and financial costs. Our sales pipeline is building well and provides good earnings visibility for the full year … We continue to be very active on the private rented sector acquisitions front and are appraising, reviewing and moving forward with a number of exciting opportunities.”

Last year the company made moves to reduce overhead costs and are on track to achieve its £27.5m overheads target, while the cost benefits are also coming from recent financing activity, with a cost of debt at around 3.7%, which is helping enhance returns as it reinvests into new private rented sector assets.

The total sales pipeline for the 2-017 financial year are unchanged from last year to £83m, and completed sales fell slightly to £49m from £47m.

Its sales performance is in line with expectations and the company expects first half volumes to return to normal levels this year, compared to the prior year where its saw increased activity ahead of the changes to stamp duty land tax.

Like-for-like rental growth rose 3.4% for the year to date, including regulated tenancies and private rented sector homes, while there was a 2.8% LFL rental growth on private rented sector homes, with a strong pickup in rental growth in January following a seasonally slower Christmas. There was also a 4.2% annualised rental growth on regulated tenancy rental reviews.

The FTSE 250 company also announced that Mark Clare who will be joining as chairman.

Shares in Grainger were up 0.87% to 248.24p at 0842 GMT.