Grainger plc reports a strong start to the year

Residential property owner and manager Grainger has reported group sales of £149.0m for the four months to January 31, 2014

A Grainger Homes development
A Grainger Homes development

Residential property owner and manager Grainger has reported group sales of £149.3m for the four months to January 31, 2014, leaving the business ‘cautiously optimistic’ about the future.

The Newcastle-headquartered company, which was established in 1912, reported that house building activity has increased over recent months, helped by positive housing market sentiment, the UK Government’s Help to Buy scheme and increased mortgage lending.

For Q3 2013, the Bank of England reported year on year increases in mortgage advances of 25%, and the Council of Mortgage Lenders indicate that this trend continued at the end of 2013. However, despite the increase in housing construction starts and Government support, overall housing supply is still considerably behind demand.

The figures are an increase on the previous year when Grainger reported sales of £64.6m for the same period in 2013. It said the rise was down to the £88m sale of its interest portfolio on 1,000 homes to Clifden Holdings earlier in the month.

The company also reported it had made £9.6m in property acquisitions in the four months to the end of January 2014, compared to £2.9m a year earlier. Grainger has said it will now explore new investment opportunities.

Andrew Cunningham, chief executive of Grainger, said: “We have had a strong first four months of this financial year, with continued increases in sales prices and margins, securing planning permission for three major development projects and a significant disposal which further underlined the robust valuations and liquidity of our home reversion assets.

“We currently see good market dynamics which provide our business with a positive backdrop going forward as we focus for this year on investment and generating new business opportunities. We are well positioned to take advantage of the current rising market and have begun to explore future value enhancing investment opportunities in both London and major regional cities. We look forward to an exciting remainder of the year.”

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