Grainger says one in ten rental flats empty

Landlord and build to rent developer Grainger has said 10% of its rental homes are lying vacant due in large part to the impact of coronavirus restrictions.

The firm reported in November that its stock was just 91% let, and in a trading update to the market ahead of today’s AGM said this had fallen further to 90% amid a “delay” in the expected recovery of the market, which it said was particularly focused in London.

The news comes amid reports of big falls in city centre rental markets in the wake of the government’s stay at home instruction and call for employees to work from home where possible.

The occupancy rate of 90% compares to a rate of 97.5% at the same time last year, pre-pandemic. Where tenants were in place, Grainger said, rent collection remained very high at 98%.

Overall it said rental income grew by 2.4% on a like-for-like basis.

Helen Gordon, chief executive of Grainger, said the firm had performed well and was still experiencing strong demand to rent homes from spring onwards.

She said: “While we have seen a delay in the anticipated recovery of occupancy in our PRS portfolio, particularly in London, due to the new restrictions imposed since the Christmas period, we are seeing strong levels of new enquiries among prospective PRS customers, albeit with the majority of interest focused on move-in dates in the Spring, pointing to a strong lettings market when restrictions are lifted.”

Last month online property portal Rightmove reported that City centre rents had fallen by as much as 12% in some parts of the country in the wake of a pandemic-induced exodus from big cities.

Grainger said it had made good progress on its development pipeline in the first half of its financial year, to the end of January, with planning consent for the first scheme in its Connected London joint venture with TfL (pictured, above left), and a £63m forward funding deal for 231 at the Millwright Places development in Bristol.

It said that schemes on site were experiencing only “marginal delays” despite social distancing requirements and that development were expected to complete “broadly in line with previous guidance”.

At the start of the week the British Property Federation said 10,152 build to rent homes were completed in 2020, 18% down on 2019, but taking the total built so far to more than 53,000.