London's would-be homebuyers have been priced off the housing ladder by soaring prices and a lack of stock. Now developers are targeting Crossrail hotspots in an effort to provide regulated rental schemes and built-to-rent homes - with more than 30,000 already underway...
London will be transformed from a city of home owners to a city of renters within a generation, according to Richard Snook, senior economist with accountancy giant PwC.
His forecast this week suggests the capital could follow in the footsteps of continental cities such as Paris, Berlin, Brussels and Amsterdam, where up to 60 per cent of households rent privately — traditionally a much higher proportion than in London.
In 2000, about 60 per cent of Londoners owned their own homes, but this is likely to fall to 40 per cent by 2025, says Snook, undoing a century-long trend towards rising rates of home ownership.
Soaring house prices, demands from lenders for big deposits and a lack of housing stock have priced tens of thousands of Londoners out of home ownership, and set them on a depressing search for decent, fair-priced accommodation from a landlord they can trust. The lack of decent rental homes has left a gap in the market that builders of new homes are starting to fill.
Already more than 30,000 build-to-rent homes are under construction or have planning permission, and many more are in the pipeline. Some of the UK’s biggest blue chip companies and financial institutions are investing billions of pounds in rental housing.
Insurance giant Legal & General will build its first scheme of 3,000 homes alongside giant reservoirs in Walthamstow, while Greystar, one of America’s biggest housing providers, has acquired a 26-acre plot in Greenford, west London, for Britain’s largest purpose-built rented housing scheme.
Traditionally, private renting has been dominated by individual landlords who own a single property or a small portfolio, but these buy-to-let investors will now face stiff competition from a more secure and regulated sector.
A 'branded' service: renters know what to expect
Demand for rental properties is expected to grow by 1.1 million households during the next five years, even if the Government hits its targets for building more affordable homes over this period. There is an oversupply of top-end properties going up in central London, with 54,000 in the pipeline that few young Londoners can afford; from the lack of sales, just 4,000 last year, it seems that neither can anyone else.
The rental scheme developers are restricted in their choice of locations by the high price of central London land. They have to search further afield for their sites but they are building close to Tube and train stations, in the suburbs as well as the inner city.
These new-style landlord companies aim to provide a “branded” service so that renters will know in advance what they are getting: fair and flexible contracts, on-site property maintenance, super-fast broadband, furniture packs and so on.
Typically rents start at £250 a week and rise to more than £600 a week for townhouses for sharers and families, plus a service charge. Interior design is considered and the environment is an import factor with landscaped communal grounds, on-site facilities such as gyms, and secure and portered entrances to foster friendships and a sense of community and safety.
Essential Living, one of the first developers to move into this market, is now an established brand with eight schemes on the go, including 249-home Creekside Wharf, Greenwich, dedicated to family renters. Three quarters of the site is being given over to open space, while there are also internal play areas, buggy storage, better sound-insulation standards, rooftop grow gardens and communal terraces.would-be homebuyers have been priced off the housing ladder by soaring prices and a lack of stock. Now developers are targeting Crossrail hotspots in an effort to provide regulated rental schemes and built-to-rent homes - with more than 30,000 already underway...
Reference:
http://www.homesandproperty.co.uk/property-news/more-than-30000-buildtorent-homes-in-the-pipeline-as-london-becomes-a-city-of-renters-a99386.html