Grainger warns on house price growth

BRITAIN's largest tenanted residential property specialist, Grainger Trust, today warned that the country faces limited house price growth over the next year.

Grainger chairman Rupert Dickinson said house prices are already 'flattening', while London and the South-East, where the firm owns £750m of property, 'has already experienced a significant correction'.

Grainger sold 1031 of its homes last year, 383 fewer than the year before, but higher prices meant it still netted £134.9m for the 12 months to 30 September, compared with £139.4m the previous year.

The company, which owns £1.4bn of property mostly residential, buys houses let on fixed tenancies and sells on the properties at a profit when the tenants leave or die.

Dickinson said today that Grainger now intends to replicate its UK model 'in the more mature econmomies of Western Europeî. It is also 'looking at more opportunistic investments in residential development land in central Europeî where house prices continue to boom, he added.

Underlying pre-tax profits surged 23% to £59.6m. The full-year dividend is lifted 42% to 23.42p and the board promised dividend growth of 10% per year in the future.

The shares are today being split on a five-forone basis after rising from £4 five years ago to £18.35 at 30 September.