How the UK’s largest listed private landlord Grainger is preparing to ride the build-to-rent wave

Helen Gordon’s interest in building homes began at a very early age. “My parents built their own house when I was three and I thought It was the most exciting thing,” she laughs, citing this as evidence that this was what she always wanted to do.

Fast-forward a few decades and Gordon is now the chief executive at Grainger, the largest listed private landlord in the UK, with more than 4,500 homes in its build-to-rent investment pipeline.

Along the way she has qualified as a quantity surveyor, worked on the development of Milton Keynes and held senior property positions at John Laing Developments, Legal & General Investment Management and Railtrack. Immediately before joining Grainger in 2015, she was global head of real estate asset management at Royal Bank of Scotland.

Her CV reveals a mixture of housing development and financial expertise, a combination that has enabled her to lead the drastic transformation of Grainger over the past few years. The firm, which has a portfolio worth £3.5bn, last month successfully registered as a Real Estate Investment Trust (REIT) as part of its bid to become a massive player in the burgeoning build-to-rent sector.

Gordon has re-positioned Grainger as a “pureplay” build-to-rent provider – selling off assets to focus on the sector – to more easily attract investment from a broader range of sources including retail and institutional investors. But how did it all begin?

The back story

The roots of her conviction about the strategy stem from a feeling that the UK housing market does not do enough to enable access to institutional and retail investment. “I’ve always had a really strong belief that, of all the property sectors, residential will deliver the best risk-adjusted returns over the longer term,” she says.

“And I think it’s really odd in this country that 98% of all landlords are small buy-to-let landlords. If you go to Germany or the US, the majority are professional landlords, and so why aren’t we giving investors access?”

Gordon says the “simple reason” for this is that housebuilders in the UK are used to operating a “return on equity” model, as opposed to a long-term investment model that is attractive to patient capital.

The concept

Put simply, Grainger believes there is huge appetite among institutional and retail investors to put money into build-to-rent. This is fuelled by changing habits and reduced mortgage availability increasing demand for rental housing, coupled with smaller landlords exiting the market.

Grainger has previously cited figures from the Centre for Cities showing a 4.3 million homes shortfall and reports from Savills projecting a need for up to one million new private rental homes by 2031. Gordon also believes that the current government is positive about build-to-rent, despite ministers’ repeated pledges to prioritise social rented housing.

“The government has got this 1.5 million homes target and they realise build-to-rent is an important component on delivering that,” she says.

Gordon points out that rental homes can be absorbed into the market – that is, let out, much more quickly than homes can be sold. “I always use the example of our biggest scheme, Clippers Quay [in Salford],” she says.

“It’s about 600 homes, and we delivered that in 18 months. But, had that been a full sale product, with the absorption rent for a rate for a house builder, it would have been about eight years [to complete and sell].”

She also suggests the Labour government, which has shown a keenness to regulate the private rented sector, might be more comfortable with large institutional investor-owned landlords. “We’re a FTSE 250 company, they can hold us to account much easier than small buy-to-let landlords,” she says. “We’ve also got a brand to protect.”

The strategy

So, Gordon is absolutely convinced of future rising demand for build-to-rent and of the desire among investors to put money in, while also being confident that ministers are broadly supportive. But how to make the most of this opportunity?

This, in a nutshell, has been the objective of the transformation project Gordon has led at Grainger over the past nine years, pivoting the firm to try and take advantage of these trends.

Nine years ago, she says, the business she calls “old Grainger” owned a much wider variety of assets than it does today. These included housing for sale and large numbers of regulated tenancies – tenancies created before 1989, which offered tenants the right to have a fair, often below-market, rent set by a rent officer.

Gordon has led a drive to sell off large numbers of these assets and focus predominantly on creating a build-to-rent portfolio. This shift can be seen in the figures (see box).

In 2016, nearly two-thirds (63%) of Grainger’s 5,843 rental properties were regulated tenancies. As of this year, this proportion had dropped to 12%, with Grainger’s portfolio now consisting of nearly 10,000 build-to-rent homes and 1,340 regulated tenancies.

“We’ve switched from a trading company to an investment company,” she says.

Under Gordon, Grainger has also adopted a strategy of building homes in regional towns and cities with the greatest demand for rental housing and growth potential. “We very definitely had a very clear investment strategy as to where we were going to invest,” she says.

“So London is, of course, still the best rental city. But it is the hardest to develop in. We chose 22 towns and cities across the UK.”

These include Manchester, where Grainger owns around 2,000 homes, Liverpool, Newcastle, Bristol, Birmingham, Leeds, Derby, Nottingham, Milton Keynes, Cardiff, Sheffield, Newcastle, Southampton and Oxford.

The firm focuses on what Gordon terms “the deep mid-market”, people ranging in age from early 20s – including university leavers – through to people in their 40s. Gordon is clearly proud of the CONNECT platform technology the landlord uses to interact with its residents which allows them to book repairs, with work all done in-house by Grainger staff.

This focus on investing in these towns and cities has played a part in boosting Grainger’s rental income from £31m in 2016 to around £120m this year.

The future

In the short-term, Gordon will be hoping Grainger’s conversion to a REIT will have the desired effect. The move, which completed just over three weeks ago, is expected to save the company £15m in corporation tax in its first year alone and help it to attract investment from a larger pool of investors.

A REIT is a tax-efficient vehicle, under which a firm must derive at least 75% of its income from rental activities and distribute at least 90% of taxable profits as dividends.

Gordon is hopeful the move will attract retail investors along with some institutional investors who only invest in REITs. “The exciting thing is for retail investors – so, people with their ISA – is if they if they invest in Granger as a REIT, our dividend comes through tax-free,” she says.

Grainger forecasts its EPRA earnings growth (a measure of underlying growth used by investment companies) of 25% by 2026 and 50% by 2029.

This is all commendably optimistic but what about the recent slowdown in housebuilding activity across the country and in London in particular? After all, she described a recent report by consultancy Molior showing 23 London boroughs did not start a single home in the first quarter of 2025 as “terrifying”.

“The government is going for growth and productivity [and] London is obviously one of the big growth engines for the UK and yet we can’t house people here,” she says. “It has to be fixed.”

More affordable housing is the answer but Gordon warns against relying on mid-market housing developers such as Grainger to deliver this as viability is a constraint “There’s a lack of understanding of the dynamics of how much building costs in London,” she says.

“If you are providing deeply-discounted homes [through section 106 agreements], what you have to be building is very expensive homes [on the rest of the site] because you have to have that profit margin in order to provide the social home.”

Gordon believes the government and mayor of London need to “bite the bullet” and admit that “mid-market housing cannot support deeply-discounted housing, therefore it needs subsidy”.

Another fly in the ointment is of course building safety. As many of Grainger’s build-to-rent developments are new, they have not required much in the way of remediation work to fix historic defects.

However, the developer does have seven developments which need to go through the gateway 2 approval process that is leading to so many schemes across London being held up by the Building Safety Regulator.

“It is putting up a huge barrier, because you have to design everything and then take it through the process, as opposed to having the flexibility to change when things happen on site.”

Because the rules also apply to adapting existing buildings, the current bottlenecks can act as a disincentive to carry out improvement works or alterations, she adds.

But ultimately, Gordon stresses, she does not want to dilute safety either. “It is about getting the efficiency around the Building Safety Regulator that doesn’t dilute safety, just in terms of their processes.”

One can detect some frustration here around current government policy. It is clear that Gordon wants to crack on and build more homes. Grainger is currently developing around 1,500 homes a year but the firm’s chief executive is keen for this to increase. Her long-held fascination with building does not look like being diluted anytime soon.