The UK’s largest listed residential property owner and manager has released a trading statement today and with many property market investors concerned over Brexit, the performance of Grainger  (LSE: GRI)  in the year to 30 September offers some clues as to how June’s referendum result is affecting the sector.

And the answer to the big question? It’s not affecting it much at all so far. Grainger has experienced good rental growth since its last update on 11 August. Its sales performance has remained strong and its efforts to reduce financing costs are starting to bear fruit. It now expects recurring profit for the full year to be at the higher end of previous guidance of above £50m.

Encouragingly, Grainger expects to report modest growth in the market value of its property assets in the second half of the year. That’s despite changes in stamp duty legislation and market concerns after the EU referendum. This shows that while there were major concerns in the immediate aftermath of Brexit, the reality for the UK housing market has been a return to modest growth.

Looking ahead, Grainger is forecast to report a rise in earnings of 22% in the current financial year. Although it has a relatively high price-to-earnings (P/E) ratio of 28.4, when combined with its strong growth prospects it equates to an appealing price-to-earnings growth (PEG) ratio of 1.3. This shows that Grainger’s valuation includes a margin of safety so that if the prospects for the UK property market worsen, its share price performance may not deteriorate as quickly as it otherwise would.

Grainger also offers upbeat income prospects. It may only yield 1.7% at the present time, but dividends are covered 2.1 times by profit. This indicates that dividend payments could grow at a rapid rate over the medium-to-long term. As such, Grainger could one day become a solid income stock.

Brex appeal

However, property sector peer Berkeley (LSE: BKG) could be a better buy than Grainger. It has a P/E ratio of only 6.1 due in part to fears surrounding the wider property market. Certainly, Berkeley lacks the growth appeal in the short run of Grainger, since its bottom line is forecast to fall by 1% next year. However, with sterling falling to just £1/$1.23 post-Brexit vote, the appeal of property in the UK is likely to increase for foreign investors. This could help to support London and other prime property locations over the medium term.

In addition, Berkeley yields 8.3% from its five-year dividend plan, which will see £2 per share paid out each year. And with dividends being covered almost twice by profit, they appear to be highly affordable.

Clearly, property prices in the UK are high relative to incomes. Therefore, the growth of house prices is likely to come under a degree of pressure when the uncertainty of Brexit is added into the mix. But with Grainger and Berkeley offering low valuations and income appeal, they could prove to be sound, albeit volatile, investments for the long term.

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Peter Stephens owns shares of Berkeley Group Holdings. The Motley Fool UK has recommended Berkeley Group Holdings. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.