Grainger sees small uptick in UK homebuyer demand

Says pent-up demand for residential starting to grow

Grainger Plc, Britain's biggest housing landlord, said it had started to see a gentle pick-up in demand for residential property but bargain-hunting buyers continued to put pressure on prices.

Grainger said on Tuesday it had seen an increase in the number of viewings for vacant properties last month as would-be home buyers moved to act following aggressive interest rate cuts by the Bank of England to 1 percent.

Despite the rise in interest, Grainger said trading conditions remained "extremely demanding", with the lingering shortage of mortgage finance frustrating many potential transactions.

"The market depends upon an easing of the current financing constraints to enable it to stage a recovery," it said.

"We have noted the introduction of new mortgage products in the last few weeks, albeit with lower loan-to-value and salary multiples than has been the case for the last few years, and whilst these are positive developments, it will take time for purchasers to be able to respond," Grainger said in a statement.

Grainger's pipeline of residential sales amounted to 58.9 million pounds ($87.6 million) at Jan. 31, down from 63.9 million a year earlier.

Group debt was now around 1.665 billion pounds and the estimated loan to value ratio, based on September valuations, on its core borrowing facility was 66 percent.

Grainger said it would continue to pursue sales and cut overhead costs to consolidate and protect this financial position ahead of the next covenant test, which is due to take place on March 31.

Elsewhere on Tuesday, the Royal Institution of Chartered Surveyors said the outlook for Britain's housing market remained grim, as it posted another monthly fall in the number of completed house sales in January.