Completing London’s housing puzzle: build to rent can help
With almost half of Londoners living in rented accommodation, leading business group London First has joined forces with London Councils and Turley to launch a new guide explaining the ins and outs of the build to rent sector, ahead of next week’s MIPIM conference, which is now in its 30th year.
The report, “Everything you need to know about build to rent in London”, launched 7 March, provides an in-depth guide from investment models to who lives there, an analysis of numbers in the pipeline, and borough-by-borough examination of council planning policies covering build to rent.
Among the case studies featured are Transport for London’s investment partnership, through to Quintain’s £3 billion transformation of Wembley Park, which will deliver 3,000 build to rent homes.
London First Executive Director of Housing, Jonathan Seager, said:
“Build to rent has a vital role to play in London, helping to increase supply while professionalising the rental sector. Councils are critical in making build to rent a success across the capital, both in getting planning policy right but also investing in it directly as a future revenue stream.
“There is no single, simple solution to London’s housing crisis; alongside more land being made available and more investment coming forward, better and more innovative ways of building, such as build to rent, are critical if we are to provide the homes people need.”
The report shows that London is increasingly a city of renters, with the percentage renting privately continuing to rise rapidly. 27% of the capital’s population are now living in privately rented accommodation (compared to 21% living in some form of affordable housing) and is expected to top 40% by 2025. However, the quality of that housing still varies considerably, giving build to rent a clear role to play in professionalising the rented sector.
From Hayes in the west to Barking in the east, Croydon in the south to Wembley in the north, as well as several central locations, build to rent is becoming a fixture across the capital. Among the key findings:
- There are now close to 15,000 build to rent homes built in London alone, with just over 19,000 homes under construction and over 38,000 more at various stages of the planning process;
- Recent research shows that £3.1 billion was invested in build to rent in 2018, up 33 per cent from 2017; and
- £33.8 billion of institutional equity is targeting investment in the sector over the next five years.
The types of people who live in build to rent homes also continues to shift. While the sector provides quality accommodation for the professionals that London needs to remain globally competitive, it also offers homes for essential workers running London’s key services and forms part of the multi-pronged solution needed to tackle London’s housing crisis. The Mayor’s London Plan states that the capital needs to build 65,000 new homes per year, which is more than double what’s currently being delivered.
Councillor Darren Rodwell, London Councils’ Executive Member for Housing & Planning, said:
“London is becoming a city of proud private renters once again. It’s clear that all levels of government need to support a greater diversity of the types of homes that are built in the capital, which will contribute to increasing overall supply.
“This joint research highlights the opportunities for delivering high-quality build to rent developments for Londoners, and boroughs are keen to help make this happen. Increasing delivery of build to rent housing is a vital part of addressing London’s ongoing housing crisis.”
Oliver Jefferson, Associate Director, said:
“Build to rent presents some unique planning considerations but is fundamentally about delivering new homes, which is a familiar challenge for the planning and development sector. Access to a wider variety of homes will help to ensure London’s success can be sustained.
“Particularly given current political uncertainties, it is important to send out a positive signal to investors that London is open for business and can house its growing population. It is encouraging to see that boroughs are increasingly supportive of Build to Rent developments and that the planning policy environment is responding to this opportunity to help tackle the housing crisis.”
8 March 2019