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Mapping Build to Rent Policy in London Boroughs

Georgia Crowley & Adam Donovan 13 Apr 2022
The Build to Rent sector is booming. But is the boom reflected in local plan policy across London? Research by the British Property Federation earlier this year found that the Build to Rent (BtR) sector pipeline grew by 8% in 2021, and showed construction in regional cities in the UK outpacing London. There has been notable investment activity driving investment levels in BtR upwards in the last two years, with various acquisitions and deals listed in this article and many pension funds diversifying into the BtR market. But where BtR will be focused is informed by planning policy; perhaps the most important public policy issue that impacts the location and implementation of BtR. UK and London Wide Strategic Support The birth of BtR within the UK can be traced to 2012 as part of the legacy of the Olympic Games in London with the conversion of the East Village into rental properties. As BtR has evolved, so too has national and strategic planning policy which seeks to control – and mostly support – this specific housing product. The National Planning Policy Framework (NPPF), associated Planning Practice Guidance (PPG) and the London Plan have all released BtR-specific commentary to clarify the nuances and requirements of what is still a relatively new sector with differing planning requirements. The NPPF (2021) definition sets out that BtR is: “Purpose built housing that is typically 100% rented out. It can form part of a wider multi-tenure development comprising either flats or houses, but should be on the same site and/or contiguous with the main development. Schemes will usually offer longer tenancy agreements of three years or more, and will typically be professionally managed stock in single ownership and management control.” Meanwhile, the London Plan (2021) qualifies the criteria BtR schemes in London must meet (Policy H11): all units being self-contained and let separately with longer tenancies available to all tenants; being held under a 15 year+ covenant with a clawback mechanism to ensure the covenant is not broken; having unified ownership and unified management with an on-site presence. The Plan explicitly requests that boroughs “take a positive approach to the Build to Rent sector to enable it to better contribute to the delivery of new homes”. But how is this strategic support reflected at the local level by London Boroughs? London Boroughs – A Disparate Approach We have undertaken research to understand how the 32 London boroughs are responding to the growth of the sector and the strategic obligation to support the asset class in their local planning policy.   As with many policies issues across London, the picture is mixed: There are six authorities with explicit policies that support BtR in adopted Local Plans, where developments adhere to other plan policies and controls. Six authorities have draft policies supportive of BtR. Six authorities reference support of BtR in their supporting text and five authorities reference general support of high quality PRS schemes though without explicit reference to BtR. Only LB Islington’s draft Local Plan policy is expressly against BtR development in the Borough, stating the ‘PRS development model does not have a tole in meeting identified housing need in Islington.’ 11 authorities do not make reference to BtR in the Local Plans at all. Our research shows that there are more boroughs with a supportive approach to BtR than not and, as a general rule, it appears the central boroughs are more supportive to BtR or have a policy position, generally aligned with the London Plan. Moving forward, we expect the position shown in our map to change as Local Plans are reviewed and are required to demonstrate conformity with the London Plan. However, as planning policy often seeks to counter a sector’s proportionate growth in the property market (think London student housing), there may also be an increase in the number of authorities who seek to limit BtR as a response to the increase in the number of schemes. What is clear is that BtR is a sector which will continue to mature and evolve over time. How planning policy responds and adapts to this will be key to the future direction of the sector. The map below demonstrates an overview of our findings[1] - hover over each borough to find out more. For further details of this borough-level research and our experience and intel in the BtR sector, please do get in touch. Key Contacts   Contact 020 7837 4477   Contact 020 7837 4477 Contact 020 7837 4477           [1] Data collected w/c  21st March 2022  


Generation Gym: have you been to the gym this week?
Ask the question “have you been to the gym this week?” and more often than not the answer these days will be ‘yes’.  Within my circle of London based friends, the answer is more likely to be, “of course; I did a HIIT session on Monday, ran 5k Tuesday, rest day Wednesday, did a WOD at the local CrossFit Thursday and have a PT session this eve - how about you?” This may make some of you feel exhausted, a bit guilty or even sigh and roll your eyes, but I’m afraid to say I’m the person that will answer “that’s awesome, me too!” It seems in the past few years fitness has developed into something of a social identity - at least among the plugged-in, upper middle class, roughly millennial-age urbanists. On reflection, I can vouch for that; if I’m not working or with my family, I’m almost certainly in the gym, where I have made a good few friends and have now become part of an established community in my local area.  It is a genuine way of life and I am certainly not alone. According to research conducted by Leisure DB, we are officially a nation of gym-goers. The UK Fitness Report has found that UK gym memberships has grown by more than 5% year on year, meaning 1 in 7 of us now use a gym (or at least pay to be a member of one). It seems the current generation of 20- to 30-somethings are knowledgeable and care about health and what they are eating and drinking, right from where produce is sourced to understanding its nutritional value better.  This has recently been evidenced by various surveys, showing that this generation is generally  drinking less alcohol than our predecessors, with even a growing proportion thinking of completely abstaining from alcohol altogether.  Times are changing and there is a generational shift from the baby boomers in terms of how spare time is used and valued.  The fitness market has of course latched onto this rise in the time being spent in the gym and, over the past decade, there has been a significant boom in not only the number of gyms but also the types of gym – a trend evidenced by Colliers International in their 2017 review of the Central London Gym market. Constant changes in market trends and how the property market quickly adapts to meet new demands can be observed.  So now not dissimilar to how the retail sector has had to adapt (large format stores giving way to convenience and the likes of Aldi and Lidl providing more variety for those shopping to a budget), the fitness market is now following suit – convenience AND knowledge are king to the consumer.  No longer is the market dominated by the big, standard format gym providers like Virgin Active and Cannons, with their standard gym formats and pricey fixed yearly contracts. We are now seeing the rise of budget gyms such as Pure Gym and easyGym (yes even easyJet has recognised there’s good business to be had here) offering cheap monthly/pay-as-you-go memberships, as well as the rise of specialist studios and spaces - YourZone, Barrys Bootcamp, Crossfit gyms and Soul Cycle to name but a few.  The word ‘budget’ might conjure up images of paying for the bare minimum along the lines of budget airlines easyJet and Ryanair, where every little extra such as signing up to a class, using the pool or asking for a towel will cost extra, so by the time it’s all added up, the more expensive option might just as well have been paid for?   Pure Gym from £19.99 per month     Fitness for Less £15.99 per month             easyGym £8.99 per month       Well apparently not; ‘budget’ gyms have all the latest equipment in conveniently located spaces, full suites of classes and more often than not, they are open 24/7.  They may have slightly less staff hanging around than the usual gym, no in-built coffee shop or chill-out areas, no free toiletries and the necessity of taking your own towel and padlock but the cost of going to the gym is not an excuse anymore!  Budget gyms account for the biggest area of growth in the UK fitness industry.  There are now more 500 of them, accounting for more than an estimated 35% of all gym memberships. As well as budget, there has also been the rise in the more specialist and boutique studios/gyms, some zoning in on the latest technologies and fads taking hold in the fitness business.  A prime example is the rise of High Intensity Interval Training (HIIT), with the subsequent rise of franchises such as Barry’s Bootcamp; clients pay a fair-sized sum for the privilege of being shouted at by trainers, over loud music and in the dark. They burn a silly amount of calories in a packed room for 50 minutes. There is something for everyone out there now (although you may have to dig a little deeper into your pockets!). This is not to say the days of the ‘old school’ gym providers such as Virgin Active and David Lloyd are over; there is still a dedicated group of gym-goers in the market who are willing to pay more and even travel a little further for all the extras.  Given the competition presented by the budget gyms, Virgin Active have recently announced the sale of a number of UK/London clubs so it can focus on the upgrade of its luxury ‘Collection’ clubs.  So what does this mean for the development industry? Accommodation-wise and right now, any space - whether it is a 50sqm ground floor shell, old industrial shed, basement or even rooftop space – could be a gym, and potentially a new community hub.  It used to be the case that developers would often look at left-over, unusable and/ or least valuable space in a scheme and count out gym use, either due to size (too small) or lack of need (there was already a gym nearby).  Well not anymore; the market is much more flexible and tangible now.  Generation gym – being all-knowledgeable, highly demanding, and wanting to try all new fads whilst still seeking the all-important convenience factor – love choice and variety, with some choosing to be members of more than one gym (as they offer completely different things).  In fact, generation gym, particularly in London, would form a large part of the group labelled as generation rent – the same group that is driving the Build to Rent market and more often than not, that expect gyms to be a part of the purpose-built facilities they are buying into – again, convenience is key! The new gyms don’t need large floor areas so when developers are formulating their next project and considering options for uses or what to do with that basement or compromised units why not see if a gym or studio could make best use of that space. A gym/studio could even make a good temporary meanwhile use. With local authorities giving increased consideration to health impacts and benefits a gym could make just as much sense as any other commercial option. Incorporating a gym could also assist in making a genuine case to local authority planners that the facility will become a valued community asset.