Grainger enjoys strong level of rental demand in the UK housing market

5th Feb 2015 09:07

Residential group Grainger has reported solid trading during the last four months, with a pipeline of sales of £102.3m and strong levels of rental demand in the UK market.Grainger spent £85m in acquisitions since the start of the financial year and increased its rents by 6.3% versus last year.Chief executive Andrew Cunningham said: "We have seen positive trading conditions in the new financial year, with robust sales, good rent increases achieved and fee levels in line with expectations."While home buyers have become more sensitive to pricing in recent months, the price points of our properties continue to generate strong interest and sell at levels above their vacant possession value in London and the South East, as well as the other UK regions where we operate."Cunningham added that rental demand for new lets and renewals remained strong.However, the group expects a softer transactional market for home sales during the UK General Election. Uncertainty in the Eurozone might also affect the housing market, Grainger said.Nonetheless, low interest rates, improving real ages, changes to the stamp duty regime and a positive balance between supply and demand are expected to sustain a growing housing market in the UK during the year.Grainger last month sold an equity release portfolio to Clifden Holdings for a deferred consideration of £35m, though Clifden has not paid the consideration yet as it has been unable to securitise the portfolio.Numis analysts said the situation is "disappointing" but said that in its view the worst case scenario was "a £15m shortfall which only equates to 1% of our 2015 triple net asset value per share forecast".Shares fell 1.31% to 204p on Thursday at 09:59.