Industry looks for ways to future-proof London’s housing market

FUTURE OF LONDON: Experts discuss ways to create viable homes and communities in the capital. Panellists at the Future of London event – hosted by EG at the Printworks in Canada Water, SE16 – discussed affordability, space in the city, and how the gap “between the rich and the many” was widening. John Connolly, head of UK development at Far East Consortium, said the government could either address this by building more affordable homes in general, or by introducing commitments as part of land acquisitions to make a certain percentage of developments affordable, based on local wage levels. Maximising value Connolly said: “In terms of London, it comes down to mathematics. The fundamental problem is with the fact you have got land, which is overly priced, and then you have got to go through the planning system where you have to pay a huge amount of [tax]. “Then you have to deliver the revenue from the private element of the development, which means you have to maximise that value. He added: “We are a bit more flexible in doing that in Manchester than London. If we have the volume and skill to do it we can deliver different types and values of residential.” Connolly said: “But in London where there are one-off developments of between 200 and 500 residential units, it is difficult to go through that initial stage of acquisition into planning and come up with a solution that is probably not pushing the best value.” Alex Lifschutz, director and founder of Lifschutz Davidson Sandilands, said: “The effect of funding affordable housing by taxing of market housing is you create a polarity between expensive and affordable, with the middle being left out.” BTR oversupply Meanwhile, Lesley Roberts, partner, build-to-rent (BTR), at Allsop, shrugged off the notion that there is a risk of oversupply in the build-to-rent sector in London at the moment, on the back of “substantial” demand for BTR. Roberts said: “We are seeing a [cultural] change that people don’t always want to own a home; they want more flexibility and not necessarily the responsibility. “There is access to a lifestyle they could not otherwise afford if they were purchasing. “It is an alternative and there is more traction with the younger generation that home ownership is not everything.” Alternative uses In terms of ideal alternate options for living space, mixed-use developments were the most favoured among speakers. Connolly said: “In terms of living arrangements, we are looking at the ability to work close to where you live, to play and interact, and to have a space that it compact and usable in terms of value. “People don’t want to pay more than they need to in terms of residential units themselves. Design and community have a lot to do with it. That interaction in terms of the future of what the customer requires is also important.” Roberts said: “We have the option to create different types of spaces for living, working and playing. “Diversity and depth of offering is something I want to see more of across the board. Great places are about diversity.” Spanning generations On top of alternative uses, the panellists also discussed the importance of appealing to multiple generations. Vanessa Hale, director of research at Strutt & Parker, said: “It is the intergenerational aspect, capturing both mixed tenure and mixed ages, which allows for the ability to have both working locations and housing where some can be for rent or for sale.” The impact on the ageing urban affluent population will have on residential development in the UK is anticipated to be substantial. According to Hale, 14.5m people will be over the age of 65 in less than 10 years. She added: “Whether every developer is aware of that or thinking about it, and building it in from a design standpoint, is [not clear].” The downsizing journey Connolly said: “We are looking massively at downsizing. It is a big market for us. Everyone talks about millennials but we are looking at the older generation.” One way of doing this is to ensure variation in the units offered. Roberts said: “If you have mixed sizes in your development you can help those people go through their journey, from post-grad to upsizing when having a family, and downsizing again [when they’re older].” To send feedback, e-mail pui-guan.man@egi.co.uk or tweet @PuiGuanM or @estatesgazette