Last week I attended the EG Residential Briefing, which delved into the recent EG LOREMA 3 2017 London Residential Market Analysis: High Rise Residential Report. The report looks into the construction of towers (20-storeys and higher) underway in the capital. Take one look at the London skyline and you will see evidence of the period of growth in construction London is currently experiencing – the cranes. No matter which way you look, they’re everywhere. When you look at the stats and figures, it actually seems surprising that there aren’t more cranes around. At the end of 2016, there were over 52,000 residential units under construction in London, up 110 per cent on the last peak of 2007, and the highest number of units under construction in the Capital we have ever witnessed.
A significant contribution to these numbers is the substantial number of towers that either started construction or were under construction in 2016. 47 towers started construction in 2016, and here is a fun fact for you – this is equal to the total of number of towers that started construction for all the years from and including 2005 to 2012. It also marks a 114 per cent increase on 2015.
There seems to be an argument that there is ‘no plan’ for tall residential buildings, when in actual fact the construction of towers is predominantly occurring in the Opportunity Areas stipulated in the London Plan. The London Plan identifies 38 Opportunity Areas, and of these areas, towers have been proposed in 34, leaving only Bexley Riverside, Bromley, Kensal Canalside and King’s Cross without a proposed tower. In fact, just five Opportunity Areas account for over half of all tall residential buildings proposed over the past 15 years – Isle of Dogs; Lower Lea Valley and Stratford; Greenwich Peninsula; Vauxhall, Nine Elms and Battersea; and the City Fringe.
As house ownership in the capital is becoming increasingly out of reach for the average Londoner, we are seeing towers increasingly being built specifically for PRS. With more than a quarter of the towers granted consent last year to be built for the rental market, this is up from essentially nothing a few years ago, and is likely to increase further over time. Soon, PRS will be the biggest tenure in terms of occupants across the capital.
When build to rent developers invest, they do so for the long term, meaning they build with durability in mind. They look to create a place that lasts, a place people want to leave, not just invest in. As there has been a steady shift from towers in the more central locations, towards outer London, a greater emphasis is being placed on creating a sense of community by focusing on the amenities on offer and the public realm.
The full EG LOREMA 3 2017 London Residential Market Analysis: High Rise Residential Report goes into greater detail about the rise the Capital is seeing in construction, and more specifically high rise residential buildings. You can download it here.