23 February 2016 by Lizzie Greenway
London looks set to follow European cities such as Amsterdam, Berlin, Paris and Brussels as the city becomes a city of renters. As the city prepares for the rental market to increasingly expand, there are more than 30,000 build-to-rent homes in the pipeline. Companies are investing millions in the rental market, to fill the void of acceptable rental homes and admirable landlords. Legal & General, the large Insurance Company will begin with building 3,000 homes in Walthamstow, and many more are set to follow suit, with London’s blue chip companies and some financial institutions investing.
The buy to let market looks set to be better regulated and more secure, ideal for renters. Within the next five years it is estimated that the demand for rental will increase by 1.1 million. Developers are cashing in on this by building outside of the city, in more affordable boroughs, but close to the tube and train stations, so it is still viable to commute.
The rental service provided by these companies will be uniform, residents will know what experience to expect, with contracts flexible and fair, furniture packages and on-site maintenance; similar to what ex-pats experience in countries such as Dubai when it comes to rentals.
Creekside Wharf in Greenwich is an example of a successful scheme aimed at family rentals. They currently have eight rental schemes, the Greenwich site with 249 homes being just one of them. The site has dedicated 75% of the site to open space, play areas, rooftop gardens and communal areas, providing quality of life for families in the city is key to the ethos of their schemes.
In February a £100 million North London build-to-rent tower was approved, after previously failing to gain planning, The Department for Communities and Local Government granted permission for the 24-storey block of flats. During the planning process the scheme underwent significant scrutiny, something Scott Hammond of Essential Living believes only sought to reveal “the significant benefits of the scheme in terms of new homes for rent and community space.”
But where looks set to be best to invest in buy-to-let? Research Analyst at Chestertons, Caspar Bell, suggests the following locations as ones to watch when it comes to the rental market. The Isle of Dogs is undergoing significant regeneration with 10,000 new homes and 110,000 new jobs forecast by 2031; Croydon is also set for improvement with £5.25 billion being pumped into regenerating the area; Tottenham Court Road is set to become extremely sought after with crossrail arriving, a new housing scheme and an excellent commute.
As mentioned previously Greenwich is an area to watch, with regeneration currently underway there is still plenty afoot for the peninsula. Cricklewood and Brent Cross are up and coming, as of yet the area is not particularly desirable but the forecast suggests a bright future for these two areas. With an enormous regeneration package, including new schools, new facilities, 10,000 new homes and open spaces created; this area is set to be a slow burner, with the development spanning some time but if you can afford to sit on your investment it may be the ideal area.
But is the expansion of rentals going to be the long-term situation in London? Well, some would suggest so, Richard Snook, senior economist at accountancy firm PwC, believes by 2025 the market for rentals is set to increase again. In 2000 60% of Londoners owed their homes but by 2025 he believes this figure will only surmount to 40%, shifting the long running history of ownership in the city in the other direction.
Maybe the long running obsession with getting on the property ladder is finally dwindling. It seems we are as a nation beginning to rethink rent; the tenants’ rights are beginning to be prioritised with their quality of living now high on the agenda. The new buy-to-rent schemes seem to be a step in the right direction.
Creekside Wharf: http://www.essentialliving.uk.com/developments/creekside-wharf/
Legal and General Development: https://www.lettingagenttoday.co.uk/breaking-news/2016/1/legal--and--general-reveals-first-three-sites-in-3-000-home-build-to-rent-plan GO BACK