GENERATION RENT
A new age of city dwellers are to become lifelong tenants as, for the first time in decades, more people live in private rented homes than in social housing, David Spittles writes
Thousands of young Londoners need homes but will never be about to own one. It’s a dilemma that developers are addressing with new-build, attractive, secure and fair-priced rentals launched for a new generation of lifelong tenants.
More than 30,000 new flats for rent are under way or poised to be built in all but three London boroughs. And many more rental homes are coming down the pipeline. This renting revolution is confirmed by the latest research from property analyst BNP Paribas. Already, for the first time in decades, more people are living in private rented homes than in social housing.
Last week, Gavin Barwell, Theresa May’s new housing minister, signalled an important policy shift away from owner-occupation, relegating David Cameron’s “starter homes” initiative and switching the focus to the private rented sector in a bid to get more homes built. With tens of thousands of people priced out of home ownership in London, and lifestyle changes boosting the number of private renters looking for decent-quality, fair-priced accommodation from a regulated large-scale landlord, the major property
developers, big financial institutions and even hedge funds have seen, and are happy to plug, the gap in the market.
Ironically, some of the biggest providers are charitable housing trusts who traditionally have catered for social housing tenants. Peabody has embraced build-to-rent, while L&Q, the biggest association, has launched a scheme of 238 flats in Lewisham, the first of 5,000 homes it plans to build over the next five years. Fizzy Living, an offshoot of Thames Valley housing association, has schemes in Stepney, Poplar, Lewisham and Finchley. Londoners in the 20-45 age bracket and in permanent paid employment are the main target audience.
Typically, rents start at £250 a week and rise to more than £500 a week, calculated as a reasonable figure for young workers in finance, law, retail, tech and media as well as public sector key workers such as teachers and doctors. Critics say this rental level is still too much for those with average earnings.
Families are in the mix
Families as well as singles and couples are in the mix. A scheme specifically for family renters has been unveiled at Greenwich. Creekside Wharf will have 249 homes, a nursery, internal play areas, buggy storage, extra sound-proofing, laundry rooms, rooftop grow gardens and communal terraces with barbecues and pizza ovens. Three-quarters of the land will be dedicated to providing communal open space.
At Royal Wharf, a 3,300-home riverfront development in Docklands, new four-bedroom townhouses rent from £695 per week and are identical to houses alongside that cost £720,000 to buy. Private renting in the capital was popular right up to the Sixties, then quickly declined. Lower mortgages and taxes encouraged private landlords to invest in rental accommodation, and the buy-to-let boom of the last decade brought more rental property onto the market. But new high taxes on second homes have recently
disincentivised private landlords. Big companies are taxed differently and are offering fair and flexible tenancies that in turn should safeguard tenants from rogue landlords. The new corporate-style landlord companies want to establish reliable branding, where renters receive tenancy contracts. These lifestyle apartment blocks also offer onsite amenities such as gym, swimming pool, laundry and meeting-up areas. There is regular property maintenance, free wi-fi and superfast broadband, furniture packs plus a concierge, all to (hopefully) encourage a community of like-minded residents.
What’s on offer
Essential Living, an early starter, has a dozen projects on the go, including schemes in Bethnal Green, Deptford, Holloway, Acton, Brentford and Camden. Martin Bellinger, chief operating officer, says “newstyle private renting is increasingly a lifestyle choice rather merely an affordable alternative to buying”.
At Vantage Point, 118 one- and two-bedroom flats in a 17-storey tower above Archway Tube station, residents can choose from five interior design options. It is a hotel-like operation, having a triple-height glazed entrance lobby and 24-hour concierge staff. The top floors of the building, which normally would be private penthouses, are communal spaces which residents can book for dinner parties. There is also a rooftop terrace, sky lounge, library and games room.
The company claims to offer the “world’s shortest and most transparent tenancy contract – six pages of A4 that residents can read in five minutes”. Contracts can be for up to three years, and there are no renewal fees. Rents start at £375 per week.
Most rental developments are close to transport hubs, some in the suburbs. Hub Residential is targeting Crossrail locations, and has projects in Hayes and Acton. Well-connected Wembley is another rental hotspot. Around a third of the 5,000 homes in a new district ringing Wembley Stadium will be for private
rental through a company called Tipi. The formula is the same: plenty of amenity spaces, including private cinema, and superfast broadband. Rents from £1,700 a month, and no utility bills.