The Mayor, Boris Johnson, has outlined plans to create more than 1,000 new high quality homes for long term private rent to help relieve pressure on the capital’s housing market, improve standards for tenants and boost the economy.
Over the last decade the number of households privately renting in London increased by 66 per cent, with over a quarter of Londoners now renting in the private sector. While visiting MIPIM, the world’s premier property conference, the Mayor outlined his drive to use land owned by the Greater London Authority and seek institutional investors, such as pension funds and insurance companies, to invest in the construction of long-term rental developments and help meet this need.
The Mayor announced two new sites in Newham, owned by the Greater London Authority, now being fast tracked for the construction of approximately 700 homes with around a third for private rent. City Hall is seeking a development partner through the Mayor’s London Development Panel of 25 developers, which allows public land owners to avoid lengthy procurement processes and award individual contracts more quickly, and encouraging members to team up with institutional investors to bid. The 0.69 hectare Pontoon Dock site has been used as a car park for the last 10 years.
New homes on the development will overlook Thames Barrier Park to the south and west with protected uninterrupted views of the River Thames and is within easy reach of Pontoon Docks station. Silvertown Way in Canning Town was once a residential area, prior to 1860. More recently, part derelict and part poor quality commercial units along a 2.1 hectare stretch, it was cleared for development in 2008.
By targeting institutional investment in the private rented sector the Mayor aims to encourage longer term leases and more stability for tenants as well as top quality, well designed, new developments. Similar projects are already underway to provide 300 homes at Barking Riverside and 200 at Elephant & Castle on land owned by the Mayor. More sites, including Stephenson Street in Newham, will follow later in the year.
The Mayor of London Boris Johnson, said: “With London""s unprecedented population growth, housing supply and affordability is now our biggest challenge and we need to double the number of homes being built. This requires a radical rethink and it is time for a new approach which not only helps build more homes but also improves choice and quality for Londoners. Capitalising on London’s undeveloped public land I want to entice more institutional investors to come forward and invest in quality homes for Londoners, boosting the economy and creating thousands of new jobs.”
Last summer the Mayor, with preferred developers, Newington Butts Development Ltd, announced the first use of institutional investment to build a large-scale residential rental development in Elephant & Castle. Newington Butts will include 457 units, 187 of which will be affordable, and create hundreds of new jobs. The homes, when complete, will offer a unique high quality bespoke rental design, professional management services and attractive communal areas including a seven storey terrace area.
Homes in the tower, originally designed by Rogers Stirk and Harbour architects, will also be available on long leases and will mirror similar style longer-term rental apartments in large cities in the US. Within the 433 acre Barking Riverside development in east London, a joint venture between the Mayor and Bellway Homes plc, there are plans to build 318 new homes, specifically to rent, in collaboration with the residential and urban regeneration specialist Sigma and Gatehouse Bank plc.
The wider scheme, a major new neighbourhood alongside two kilometres of Thames river frontage in the heart of the Thames Gateway, will include 11,000 new homes alongside new schools, healthcare, shopping, community and leisure facilities, all supported by new public transport links. Since the Mayor took on 670 hectares of public land in 2012, a record 85 per cent of it is now developed or in the process of development. His sites, including Trenchard House in Soho, Cane Hill in Croydon, Lymington Fields in Dagenham, St Clements and Queen Elizabeth Hospital in Tower Hamlets, Catford Greyhound Stadium in Lewisham, and Greenwich Square in Greenwich, have already boosted the London economy by £3.2bn.
The Deputy Mayor for Housing, Land and Property, Richard Blakeway, said: “Housing, like roads and railways, is an essential part of the capital’s infrastructure and at the moment we’re facing an unprecedented demand for more. This calls for new ideas, new players, new funding and new delivery methods. Tapping into the benefits of long term institutional investment and making the best use of every inch of public land will help unlock delivery and provide better services and more choice for hardworking Londoners.”
Liz Peace, Chief Executive of the British Property Federation, said: “High-quality, purpose-built homes for rent are making an increasing contribution to London’s housing supply, with 8% of new homes in the capital last year provided by institutions investing in private rented accommodation. Some London sites are ideal for this type of development, where typically occupants want good access to transport and a long-term rental product – and building for rent can increase the speed at which the development is delivered and communities created. Build-to-rent won’t happen without private long-term investment partners, however, and we very much appreciate the energy the Mayor is putting in to attract institutions to invest in the capital’s housing and meet the needs of London’s young families and workers.”
The Mayor’s commitment to fast tracking development and growing the purpose built private rented sector is part of a package of wider measures he is promoting to stimulate house building. He is expanding his 100,000 low cost homes for low income Londoners scheme, helping 50,000 Londoners into low cost home ownership through his FIRST STEPS scheme, and introducing a range of innovative new measures including new housing zones and a housing bank.