Category Archives: planning

Archway tower to be reclad for new rental apartments

Rental developer Essential Living has received permission to reclad an existing office tower in Archway, north London as part of a refurbishment to create 100 rental apartments.

The approval for the reclad was given by a government planning inspector, after the local authority, Islington, failed to determine RL’s application in due time. The recladding would, she suggested, provide “significant improvements to the appearance of the building”.

Reclad and resused - Archway Tower to be reborn as apartments

Reclad and resused – Archway Tower to be reborn as apartments

“We are delighted with the decision which will dramatically improve the exterior of Archway Tower and vastly improve the horizon for many local people. Our plans will bring the building back into use to the benefit of the local area, particularly business close-by,” said Rob Whiting, asset director at Essential Living.

“As the first UK company focused on creating a rental brand, we have a long term interest in our developments both in terms of how they’re built and how they’re managed. We are looking forward to providing a highly professional service to those who rent homes within Archway Tower, helping to drive up standards in the sector.“

Local authority the London borough of Islington has been generally resistant to the conversion of office buildings to residential use, a provision eased by the government to encourage the reuse of empty commercial buildings. Speaking in 2013 as it launched a challenge to the proposals, Islington’s executive member for housing and development, James Murray, said: ‘There’s a real danger that small offices across the borough will be lost to private housing, and tower blocks will have as many flats as possible crammed into them. Archway Tower is already being lined up to have a large number of small, sub-standard bedsits squashed into it, with no affordable housing.”

Work has already started internally on the refit of the building, with flats and common areas designed specifically with renters in mind. Flats in the 17 storey block – which should have stunning views over London – will be available to rent in 2016.

Berlin shows London the way to build rental market

The residential rental market in Berlin is growing rapidly, with potential lessons for those looking to improve the situation in London and other UK cities.

Like London, Berlin has been seeing a growing population, which increased by almost 50,000 from June 2012 to June 2013. Like London, the delivery of new homes is failing to keep up with demand – and rental prices are rising as a result.

Unlike London, the market and city authorities in Berlin are reacting, and new supply is being delivered. New building starts in the city in 2013 equated to 0.7% of the total stock, a figure fully 40% ahead of London.

A new report identifies a pipeline of 13,900 new homes for rent currently under development across 191 construction projects. Further projects are expected to come into the development pipeline, spurred on by local government. City authorities calculated 137,000 more new homes will be needed by 2025, or around 10,000 a year.

Breaking down the participants in the Berlin market, the research by Howoge and BulwienGesa identifies 63% of the projects originated by the private sector, 29% by municipalities, and 7.5% by cooperatives.

Rental remains the predominant home type in Berlin, with 86% of the city’s 1.9 million homes currently rented.
One way the city authorities have directly helped promote more building is by adding extra staff to district offices, and paying a bonus for each new approved home. Urban development contracts are used to help share the burden of local infrastructure, and the benefit of increased land values after development. More herer on how Berlin authorities are planning the growth of their city.

Essential Living uses design to set rental homes apart

Essential Living, one of the new breed of private rented sector developers in the UK market, is undertaking research and conducting focus groups in a bid to understand just what today’s home renters want. Everything is up for grabs, as the group tries to redefine home renting as a painless service, rather than a hassle.

Quentin Keeble, Essential Living’s recently appointed development director, says initial feedback has been invaluable in helping the company design its upcoming schemes. “What is already clear is the principle that a person’s home should begin at the door of the building and not at the door of their flat,” he says, in an opinion piece published in Property Week. That could include, for example, turning over a penthouse apartment to shared space for residents; while this would mean foregoing the additional rental from a flat, it could deliver an equivalent long term value by delivering a more attractive package for those renting flats elsewhere in the building.

Quentin Keeble of Essential Living - focusing on design that works for renters

Quentin Keeble – focusing on design that works for renters

Essential will be aiming to use good design to deliver apartments with:

* fixtures and fittings selected for their high quality rather than just a brand name

* high energy efficiency, to keep running costs down and make a clear statement about sustainability

* smart, functional spaces with good daylight that create the feel of a home.

By getting these items right, Keeble says Essential can combine low running costs with flats that people want to not just rent, but to stay in – reducing voids and marketing costs, and maintaining long term asset value.

“The concept of selling housing as a service disrupts a market that has, until now, stigmatised renting for the many reasons we’re all too familiar with,” says Keeble. “In the PRS there’s a genuine opportunity to change how people live.”

Essential is working up private rented sector projects across London, and in key commuter locations including Maidenhead and Croydon. Several of its developments will see former office properties adapted and converted to create new apartments for long term rental.

 

Essential Living plans private rented development in Acton

Private rented developer Essential Living has bought a former perfume factory in Acton, west London, for conversion to a private rented homes development.

The site, currently home to two office buildings, has the potential to provide up to 500 homes, once redeveloped. Acton is currently the focus of much house builder and private rented sector activity, due to its position as one of the new Crossrail stations; this promises to provide residents with easy public transport access to central London and the City.

Essential Living plans to convert Berkshire House in Maidenhead into flats for private rental

Essential Living plans to convert Berkshire House in Maidenhead into flats for private rental

The site has the potential to take residential towers up to 20 storeys high, with a mix of homes. However, its offices are still occupied, and so any successful planning application could potentially lead to a residential project being completed no sooner than 2018.

Acton’s attractions mean others are taking an interest. Only last month, investor M&G forward funded a project in the area to develop flats specifically for rental.

Charlie Hustler, head of land at Essential Living, told Property Week: “This is our most ambitious project to date, both in terms of scale and scope. The housing offer will boast a range of high-quality apartments and mews homes, forming a truly sustainable community for west London.”

Essential Living's north London redevelopment site in Swiss Cottage

Essential Living’s north London redevelopment site in Swiss Cottage

Essential is backed by US investor M3 Capital Partners, and is already under way on a number of projects. It has bought several sites including an office block in central Maidenhead for conversion to flats, and an office site in Swiss Cottage, where 200 apartments are planned. While Essential’s strategy of buying office blocks and then obtaining planning consent for conversion is risky and slow initially, it does offer the company the potential for greater returns from the portfolio they ultimately develop.

Mayor calls on public sector to release land for homes

London’s mayor Boris Johnson has renewed calls for public sector departments to release land for housing. It is believed thousands of homes could be built on sites currently lying fallow, as bungling bureaucrats in the NHS, fire and police authorities and other public bodies fail to get moving.

The call for more “brownfield” sites to be released for housing development is a popular one – politicians love the idea as it takes the focus away from development in the countryside or on the edge of existing towns and villages. Yet despite regular pleas for redundant land to be brought forward for reuse, London officials revealed this week that their requests all too often fall on deaf ears.

Deputy London mayor Richard Blakeway said the NHS, in particular, simply fails to engage, telling the Standard: “Our frustration is that there are public bodies, in particular the NHS, that are sitting on huge swathes of land but have little focus on bringing it forward for development. In our last review of what land might be available, the NHS did not even provide a return.”

Among the sites sitting with weeds growing but nothing more, are St George’s Hospital in Hornchurch, which closed in 2012, the Dulwich Hospital that has stood unused since 2005, and Springfield Hospital in Barnes.

Speaking for the business community, baroness Jo Valentine, Chief Executive of London First, said: “Across London there are empty sites and redundant buildings owned by the public sector that could be much better used for housing. But there is no body dedicated to actually identifying where all this land is, so actually getting round to selling it happens at a glacial pace. First we need to give the mayor the power to create a 21st century Domesday Book for London so we know where this land is. Then we need to ensure he has the ability to get on with selling it using his trademark gusto.”

 

Councils told to stop restricting residential conversions

Government ministers have acted to stop councils restricting the conversion of commercial office space to residential use. Islington and Broxbourne councils, specifically, will no longer be able to use a legal loophole to prevent conversions, in situations where they would otherwise be allowed.

The move will give developers greater certainty when looking over tired office buildings, with an eye to creating new apartments from them. While less prevalent in the capital, the transformation of such buildings is credited with helping to deliver substantial numbers of new homes. Some developers are using conversions to create substantial private rented sector apartments, such as Westrock, as detailed here.

The office to residential conversion route was eased last year, when government officials decreed such conversions would be permitted development – meaning they could go ahead without the need to seek planning permission for a change of use. Several central London boroughs sought exemptions from the scheme, claiming they needed to retain their stock of office sites. Some, such as the Corporation of London, argued successfully for the exemption, others won an exemption in certain parts of a borough; others were unlucky.

Islington and Broxbourne chose another route to prevent the conversions in their area, harnessing an existing legal power, the “article 4 direction” to prevent schemes going ahead. Ministers have pointed out that an article 4 direction can only be used in exceptional circumstances, where there is clear potential to damage a neighbourhood, not as a blanket ban.

Earlier this year, planning minister Nick Boles commented: “Ministers are minded to cancel article 4 directions which seek to reimpose unjustified or blanket regulation, given the clearly stated public policy goal of liberalising the planning rules and helping provide more homes.”

Those involved in planning have welcomed the government intervention. Charles Mills, planning partner at Daniel Watney, commented: “This will be welcomed by developers as these article 4 directives essentially prevent them carrying out office to residential conversions under permitted development rights. It is somewhat ironic that Islington, which is in dire need of new homes, was one council deliberately holding up new development off the back of political grandstanding.”

Abu Dhabi funds to transform Manchester with private rented project

Abu Dhabi United Group, which owns Manchester City football club, is to back a £1 billion project to deliver up to 6,000 new homes in central southern Manchester.

The deal is set to leapfrog efforts by other local authorities, and by the mayor of London, to encourage housing development and the growth of a professional private rented sector. While talk in London is now of a talent drain, as workers cannot find affordable places to live, Manchester looks set to deliver.

A partnership with the city council will see an initial phase of more than 830 private rented homes delivered in the Ancoats and New Islington areas, close to the Etihad stadium. The 10 year deal under the name Manchester Life aims to deliver more than 6,000 new homes.

“The planned transformation of the eastern edge of the city centre is the single biggest residential investment Manchester has seen for a generation,” said council leader Richard Leese. “Building thousands of quality new homes will be a fundamental part of our growth story, and will deliver significant socioeconomic impact.”

According to the Manchester Evening News, the deal is significant for the inroads it makes into the city council’s housing development goal; and as a great example of public-private partnership with a major investment.  “Most of homes will be aimed at the 25-39 year old young professionals,” says the publication, “who may struggle to get on the property ladder but are eager to live on the fringes of the city in private rented accommodation.”

Construction on the new homes could start early next year.

Survey shows councils still unaware of demand for private rented sector developments

Many politicians are still blind to the importance of the private rented sector, and its relevance to those looking for a home. Just 2% of councillors surveyed put PRS top of their perceived priorities for improving the supply of housing.

The disappointing result comes from research carried out by the Smith Institute on behalf of housing provider Places for People. The study asked councillors and officials for their views on a variety of issues around housing, and discovered that while 60% thought owner occupied properties were the top priority, and 38% placed social housing top, just 2% perceived the private rented sector as needing top priority.

“Despite local authorities’ best efforts, clear appetite from investors, and strong emphasis from central government, this work shows us that more needs to be done to make it happen,” said David Cowans, chief executive of Places for People. “Councils have a key role to play in using their planning and economic growth levers to create the right environment to attract investment into this vital sector and drive up standards for tenants.”

A few local authorities are the exception, understanding the importance of PRS and taking a proactive stance. These include Birmingham which is planning to develop its own private rented sector homes, and Wandsworth which has recently approved plans for a major residential scheme with a substantial private rented element.

Paul Hackett from the Smith Institute, which carried out the research, summarised the issues raised. “Our survey shows that councils are cautious about the PRS. They want to improve the security of tenancies and housing quality, but struggle to regulate the PRS in their areas. The government needs to do more to help councils lift the quality bar across the sector.”

While just 51% of councillors thought their local plan actively supported the private rented sector, two thirds were in favour of relaxing section 106 agreements, to favour projects with a significant proportion of PRS homes.

Wandsworth leads in promoting private rented homes

London borough Wandsworth has started delivering on a promise to provide more private rented sector homes. A planning permission granted this week for a site in Nine Elms includes 114 private rented apartments within a development of 510 homes, to be developed by housebuilder Bellway.

The redevelopment of the Christies Fine Arts warehouse site will include two blocks of apartments, one of which will include 72 affordable homes, plus the 114 units for rental at open market prices, to a restricted audience of tenants who will need to have a connection with the borough. There will also be the opportunity to sign longer leases of up to five years, while rent rises will also be moderated.

As well as the private rented homes, and the 72 affordable units provided on site, Bellway will contribute an additional £10 million towards the building of affordable housing elsewhere in the borough. A manager for the rental homes has yet to be appointed, but it is expected the open market and affordable homes will be handled by the same management organisation.

The project’s private rented homes are the first fruits of a promise made less than a year ago by the council. Last summer, Paul Ellis, the cabinet member for housing promised: “We want to do even more to support those living in the private rented sector by offering development incentives to boost the number of homes being built in Wandsworth for private rent, and in the process agree with developers that local people are given first refusal over the new housing.”

“We know that people sometimes feel they lack security in the private rented sector due to things like short-term tenancies or the possibility of unexpected rent hikes, and this can stop them from feeling like they can settle in a particular place. So, the council hopes to boost the confidence of those living in this sector by arranging with housing developers for local people to be offered tenancies for new homes built specifically for private renting that provide a greater degree of stability and security, with rents that are not subject to unexpected rises.”

The Christies scheme will see Bellway deliver rental homes as well as affordable units and flats for sale

The Christies scheme will see Bellway deliver rental homes as well as affordable units and flats for sale

“Under such an arrangement, the tenant could confidently call the borough home for the long-term.”

“In order to make this new approach to the creation of private rent homes attractive to the developer, the council plans to investigate whether developers could contribute a lower community infrastructure levy as an incentive to provide this type of housing.”

“Support will also be given to developers looking to build privately let properties in locations that traditionally suit such developments – such as town centres and near to transport links.”

“The possibility of introducing requirements that newly-built private rented housing is initially marketed to local residents with longer tenancy terms than the normal six months will also be explored through Section 106 agreements.”

The project will include a linear park and limited commercial and community space

The project will include a linear park and limited commercial and community space

Speaking this week, after the scheme was granted planning permission, committee chairman Sarah McDermott said: “The scheme provides some of Wandsworth’s first homes built specifically for the private rent sector. They will be reserved for local residents and offered on tenancies of up to five years to give more security than can usually be found on the open market.”

Wandsworth’s approach, using a negotiated planning settlement with private developers, is commendable in the speed with which it has been established in practice. It goes some way towards demands from private rented sector developers, such as Harry Downes of Fizzy Living, for the planning system to give the sector a helping hand to prevent the regular loss of sites to residential developers. Unless planning authorities intervene, he argued recently, then a private developer building for sale will always be able to outbid others, in London’s current “hot” residential market.

The use by Wandsworth of a restrictive covenant, limiting access to the homes to those living or working in the borough, on reasonable incomes, is also similar to approaches being taken by other authorities, in connection with organisations including Pocket and Dolphin Living. It is a model other local authorities would do well to check out.

Vancouver tempts rented housing providers to to deliver new supply

In an echo of the situation in the UK private rented sector marketplace, authorities in Vancouver and other Canadian municipalities are working out how to encourage the delivery of new homes for rental.

In contrast with the UK, the has a strong bedrock of private rental housing, which a range of government programmes helped to deliver in past years. However, as the subsidies and programmes dried up, so did those investors taking advantage of them. The result is too little supply in recent decades; and as Michael Geller points out in an article in the Vancouver Courier, in parts of Vancouver, “not one new purpose-built rental building has been constructed in over 40 years”.

Like the Brits, Canadians have traditionally dreamed of owning their own homes, he says: and as in the UK, this dream holds less allure for younger generations, for a variety of reasons. Interestingly, one fear in Canada is that rising prices cannot be sustained, making a home not such a great investment – this is encouraging older generations to rent, rather than buy.

Vancouver is “succeeding in its efforts to increase supply,” says Geller. The authorities are trying a range of incentives including density bonuses, parking reductions, reduced municipal fees and fast-tracking of applications.

Several of those active in the growth of the professional private rented sector have called for planning concessions to help encourage investment in the sector. If these strategies are working in Canada, are they worth considering here in the UK?