Murky Depths

News in London and beyond

Deptford, Housing

Will build-to-rent help the housing crises? Well, look at this.

With a severe shortage of truly affordable homes across the capital forcing ever more people to move ever further out one salvation heralded by some has been the build-to-rent sector.

Unlike homes specifically build for rent in the past, many new homes in this sector are far from low cost. In fact, many are way above average – which begs the question of just what kind of solution they will be.

Finishing touches to the tower

There’s plenty of people who have been holding this sector up as some kind of solution with scant evidence so far it will do much for housing problems. Here’s one from 2015 where Your Moves’ Director of Lettings stated: “Why build-to-rent is the key to helping ‘Generation Rent’”. Even The Guardian are heralding it as some great new future using an example of a two bed in Wembley at £2000 a month.

Let’s take a look at the new tower named Union Wharf in Deptford which the developer Essential Living are wrongly calling Greenwich. Here’s the prices:

And lets take a look at nearby homes: a one bed flat can be found in various areas of Zone 2 and 3 for around £1,000 a month. Here’s one by Forest Hill station at £1050.

A 3 bed flat nearby is £500 a month less. Some are £800 less if moving a little out but still near Maze Hill station – and that’s a place that hasn’t gone after a month so you’d have scope to haggle. A Rightmove search will quickly show the cost premium.

Many new homes in Lewisham are planned as Build to Rent

These new builds are certainly not affordable compared with nearby places to live – which are already beyond the reach of many. Throwing in a £20 a month broadband package is barely scratching the surface.

Marketing

One can only assume developers are aiming these homes at people with large sums of money and/or not very knowledgeable about the area.

Not that those behind it know much about the place either. Transport links on the website to areas of employment are odd.

There’s a little place called the City of London which has a few jobs I hear, so you may think regular rail links from Greenwich or Deptford (both five minute’s walk from the development) may be highlighted. It only takes around 10 minutes to Cannon Street in the City from Deptford station – but they only give prominence with travel time to DLR destinations.

Deptford station is a short walk away

It’s as if the marketers only ever knew about the tube map which features the DLR.

The website offers more gems stating:

“Greenwich is perfect for those looking for a rural town feel whilst still living in the heart of London”.

Ok then.

Ye olde worlde. The green and cricket match just out of shot

If build to rent is the future then it can’t be so expensive as to offer a premium above elevated local homes to rent – and it would help if developers had half a clue about the area they build in. Many Londoners will just laugh at this – if they can even afford it.

 

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8 Comments

  1. Paul SuperUnknown

    The only way to eliminate these scoundrels is to cap the percentage they can earn on their investment, coupled with a stringent cap on the number of flats being built over market value.
    Why is it that many cities in Germany have rent control, yet we do not in the UK? It’s because most of the MPs and Lords have veiled interests in the property market, and refuse to constrain its rampant fleecing of the less better off population!
    I wonder where they think the money will come from after Brexit is complete?

    • herosum

      “Scoundrels” seem a bit strong. I don’t know who the owners of this build to rent site are, but let’s look at the example of the proposed similar site by L&G in Woolwich which was highlighted on this site just now. Also build to rent….Their fund has returned only 1.9% this year (http://www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?id=F00000T6CC)..hardly creaming it, doesn’t even cover inflation.

      I know this fund has lots of other properties and costs associated with it, calling builders scoundrels for investing in Brexit briton while property prices are falling isn’t the worst thing in the world…somebody needs to build something…

      • Paul SuperUnknown

        If you think building flats that people can’t afford to live in is a good thing because Brexit is coming, then we are surely lost!
        The only thing I can coming, from Brexit, is job loss, home loss, lives lost.

      • Tom

        1.9% a year is not that much. But, if you are building to rent then really you should be looking at return over 30 years or more. That will of course include all sorts of financial fluctuations, both to your advantage and not.
        Once again I think the problem is that few people are investing for the long term

  2. Jack

    Build to rent is not meant to be an affordable housing product – you’ll find the values they are charging whilst high and not affordable, are the values they need to allow those developments to take place.

    If you want lower values you have to lower build costs or subsidise build costs, which nobody is prepared to do at present.

    Affordable products such as social rent at least are meant to have some form of controls. But that requires state subsidy for longterm returns and that’s not something the Government is interested in.

    • fromthemurkydepths

      True no government for 30+ years has much interest in truly affordable housing. The housing “market” – including land prices – could stop being propped up by numerous government actions which results in this situation. Many years of short term thinking and kicking the can down the road.

      Build to rent may not be affordable but the number of people claiming it as some kind of major solution is extremely high – and so far it isn’t by a long chalk. I’m waiting for the penny to drop. Interestingly many are funded by pension funds and aimed at the young. It’ll be a big issue in terms of generational fairness.

  3. CDT

    Miost working single people on average local wages of around £25,000 to £30,000 per annum full time with no other incomes includung tax credits or housing benefit etc. Are really struggling to be able to afford the rents on these properties.

    I understand why the built to rent schems have been introduced but they are still out of reach for most of us living locally.

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