Grainger PLC (LON:GRI), the UK’s largest private rental landlord, said it expects its rental income to “more than double” in the coming years, as more UK households turn to private renting while unable to afford steep house prices.
Underlying like-for-like rents increased 3.5% in the year to 30 September, the FTSE 250 group said, which along with the acquisition of over 1,700 more private homes led to a 45% jump in net rental income to £63.5mln.
The UK’s private renting sector is becoming the fastest growing part of the housing market, expected to jump from 4.7mln households now to 7.2mln in 2025.
"We have more than doubled the size of our PRS portfolio and the net rental income of the business since setting out our strategy in 2016” said chief executive Helen Gordon.
Gordon, who was previously head of the ‘West Register’ division of RBS, which was accused of buying up properties on the cheap from businesses the bank itself had run down during the financial crisis, said that net rental income is expected to more than double again in the coming years.
She said Grainger is delivering its pipeline of around 9,000 units “at pace”, boosted by the joint venture agreed with Transport for London in April, which could see Grainger developing “an additional 3,000 units over the next five years”.
The landlord, which grew profit before tax grew 30% to £131.3mln, added that there is a “continued undersupply of rental homes compared to demand” in the private rented sector which provides a strong outlook and “compelling” returns.
Shares ticked up 2% to 280.6p on Wednesday morning.