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Planning matters

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Co-living in London

Jonathan Hoban & Anna Rigelsford 24 May 2023
Set aside conventional housing, student housing and even build to rent for a moment; an alternative form of housing is now well and truly gathering pace in London - Co-living. We delved into Co-living back in 2019 and despite our foresight, it still remains a relatively new and exciting alternative housing product. Notwithstanding this, there are now a number of successful operators across London who are providing high quality homes in Co-living schemes and the sector is gaining considerable traction. Co-living is quickly emerging in London as a new alternative approach to delivering high quality accommodation in accessible locations. It provides a multitude of benefits including flexible tenancies, fixed living costs, communal living, combating loneliness and delivering quality accommodation with excellent facilities. Co-living accommodation is also let at more affordable rates than other forms of housing for those who cannot afford/do not want to buy and do not typically qualify for affordable housing. In London, the number of households renting has now passed the 1 million mark, having risen 25% in the last decade, (ONS 2021). Rental rates continue to be on the rise, with London experiencing a 4.8% increase in rents between March 2022 and March 2023; the highest annual growth since December 2012 (ONS 2023). According to the Association of Residential Letting Agent’s (ARLA) latest Insight Report (March 2023), rental demand remains robust with limited new properties available to rent, offering little scope for a reversal in the current trend of rising rates.  As we discussed back in 2019 and as set out above, the benefits of Co-Living are clear. Co-living schemes provide residents with flexible housing, social interaction and high quality accommodation at more affordable rates and in accessible and central locations.  There is, understandably, a strong demand for Co-living and a clear needs case across London given the capital’s high housing costs. As the viability challenges of delivering conventional residential developments continue to bite, developers and operators are now also taking note and are seeking ways to capitalise on Co-living opportunities. Only a couple of weeks ago, the GLA allowed LB Ealing to positively determine a 462 Co-living scheme housed in a 32 storey tower for Tide Construction. At the end of April, the Planning Inspectorate (PINS) allowed an appeal at Citylink House in Croydon for a 498 Co-Living scheme housed in a part 14 storey and part 28 storey building. LB Tower Hamlets has since also approved a scheme on Marsh Wall on the Isle of Dogs for the redevelopment of an existing office site to provide a 46 storey building comprising 795 Co-living homes (App Ref PA/22/00591/A1). For those who read my previous blog, this was a scheme that had to be redesigned to accommodate a second staircase. The sheer scale of these developments demonstrates the level of interest and pace at which Co-living is progressing. Two years on from our previous co-living blog, Lichfields is experiencing a surge in requests for advice on Co-living. So why the sudden growth in interest? The reasons for this growth are twofold: firstly, there is a recognition of the clear benefits associated with the Co-living product; secondly, there are the viability challenges of delivering conventional residential homes in London. Construction cost inflation, high land costs and multifarious planning policy challenges have been forcing developers to rethink housing models. Given the challenges facing conventional housing, coupled with the strong demand and a clear needs case for Co-living, it is clear to see why the product is becoming so attractive. But is the planning process in London also supporting and facilitating Co-living? The London Plan (2021) does specifically support Co-living through Policy H16 Purpose Built Shared Living (PBSL; which we refer to here as Co-living). The policy sets out the qualifying criteria that such schemes must meet. This includes all private units being served by communal facilities including a kitchen, internal amenities and outdoor amenity space, and laundry and bed linen changing facilities. All schemes must also include a management plan; achieve a high quality design; be in well connected locations; and contribute towards inclusive communities. The policy also requires a cash in lieu contribution towards conventional C3 affordable housing - although last week’s draft London Plan Guidance on Affordable Housing, introduces an alternative approach, enabling Co-living developments to deliver affordable housing on site so they can follow the fast track route. Alongside Policy H16 is the draft Large-scale Purpose Built Shared Living (PBSL) London Plan Guidance (LPG). The LPG provides additional guidance on how to ensure that co-living developments are of an acceptable quality, well-managed and integrated into their surroundings. The guidance is highly prescriptive and touches on matters that are not normally discussed at the planning stage. The draft PBSL LPG underwent public consultation last spring. We expect it to be updated in Summer 2023. So, with strategic policy supportive of Co-living, are London Boroughs following suit? We have taken a closer look at how local Co-living policy plays out across the 32 London boroughs. As with many policy issues, the picture is mixed in terms of each borough’s approach to Co-living; The majority of London boroughs do not yet have adopted policy on Co-living. 10 London boroughs have standalone bespoke Co-living policy which does not refer to London Plan policy H16. Only two boroughs have adopted up-to-date policy which is supportive of Co-living (LB Westminster and LB Southwark). Eight London boroughs have policy which supports co-living schemes but with restrictive elements. Key restrictions include; Requirements for schemes to be in located in specific locations (typically focused towards town centres) (LB Barking and Dagenham, LB Ealing, and LB Newham) Higher alternative in lieu affordable housing contributions compared to delivering on site affordable homes (if required by policy) (LB Newham); Requirement for affordable housing to be delivered on site, as opposed to a cash in lieu contribution (LB Royal Borough of Kensington and Chelsea, and LB Southwark); Need to avoid overconcentration of single-person housing (LB Wandsworth); Demonstration of identified local need for co-living housing in the borough (LB Barking and Dagenham, LB Barnet, LB Croydon, LB Hackney, and LB Lewisham). Evidence that a site is unsuitable for conventional C3 housing (LB Wandsworth, LB Lewisham and LB Croydon). Three boroughs explicitly do not support Co-living in their emerging plans (LB Islington, LB Royal Borough of Kensington and Chelsea, and LB Wandsworth) – albeit two provide criteria if such schemes do come forward (LB Royal Borough of Kensington and Chelsea, and LB Wandsworth). No recognition of the draft PBSL LPG in any boroughs’ adopted or emerging policy. We expect the position shown in our map to change as Local Plans are reviewed and are required to demonstrate general conformity with the London Plan and its updated guidance. The maturing Co-living market will also inevitably inform the still-embryonic local policy context. What is clear from the map to-date is that, as specific Co-living policy is making its way into emerging and adopted Local Plans, policies are not necessarily following the London Plan - for better or for worse. It is also important to note that this analysis only considers the planning policy position and does not consider the political context which could become a barrier as more schemes come forward and the Co-living market develops. Lichfields’ view is that good quality Co-living in the right location has the potential to contribute meaningfully to London’s acute housing targets, while meeting a specific need, delivering a good standard of accommodation and strengthening communities. With clear strategic policy support in place and the emergence of supportive local policy in some boroughs, the planning system is playing a role in the growth of Co-living…but it could do far more. As developers, operators and occupiers continue to embrace the growth in Co-living schemes, it is critical to review the intricacies of adopted and emerging Co-living policy and guidance at the outset of each specific project. As ever, Lichfields is on hand to help.      For further details of this borough-level research and our experience and insight into the evolving co-living sector, please do get in touch. Image Credit: Folk at The Palm House, Halcyon Development Partners  


Planning for climate change: Is London leading the way?
Last week was London Climate Action Week 2020, where world-leading experts and policy makers have come together to deliver a series of webinars to drive the national and international climate policy response, prioritising green recovery and focusing on solutions for adaptation and resistance. To coincide with this, Lichfields is publishing a series of blogs that examine various climate change issues.  This first blog looks at how London has responded to the climate change crisis thus far. Last month, the Committee on Climate Change (‘CCC’) published its 2020 report to Parliament assessing progress in reducing UK emissions over the past year, following its commitment in June 2019 to achieving Net Zero emissions by 2050. The report highlights the importance of securing a green and resilient recovery following the COVID-19 pandemic – seizing the opportunity to turn the current health crisis into a fight against the already accelerating climate change crisis. The committee reported that a limited number of steps have been taken in the last year, particularly in terms of policy progress, despite growing levels of public concern and activism around this issue by groups such as Extinction Rebellion. Five clear investment priorities are outlined by the CCC, including retrofitting buildings and constructing new housing to the highest efficiency standards; land use measures such as tree planting and building low-carbon infrastructure such as bike lanes. What is clear is that the Net Zero Target for 2050 is only achievable if it is embedded and integrated across all departments and at all levels of Government. The CCC recommended that all policy and infrastructure decisions will need to be checked against their consistency with the UK’s Net Zero target and as such, national planning documents e.g. the NPPF should be reviewed to ensure consistency against this objective. Thus, a change in national policy approach is the key to ensuring local development plans align with the national consensus. A Carbon-Neutral London? In London, the impacts of climate change are exacerbated by its dense population and its vulnerability to flooding, overheating and drought conditions. While the City has so far been protected from its worst impacts, much of London’s ageing and energy inefficient housing stock is not prepared for temperatures recorded in the UK in recent years and our infrastructure and communities are already suffering. The Mayor has set London some of the most ambitious plans to tackle climate change in the world. His recent mayoral campaign pledge centred around delivering a £50m Green New Deal for London, with a target to be carbon-neutral by 2030 – bringing the deadline forward from the legal commitment from the government of reaching the Net Zero Target by 2050. The New London Plan intends to support the Mayor’s strategies for tackling climate change, particularly relating to the built environment. The plan focuses on building homes to the highest possible standards through a variety of programmes and policies, including: Higher energy efficiency standards - extending the ‘zero carbon’ standards, (in force for residential development since 2016) to non-residential development and new energy efficiency standards, requiring a 10% CO2 reduction through efficiency measures for dwellings and a 15% CO2 reduction for non-residential development, contributing towards the minimum 35% on-site CO2 saving. Introducing more local decentralised energy sources – to achieve air quality neutral, developments are expected to low or zero-emission heating and power sources. By 2030 the Mayor is aiming for the city wide deployment of low carbon heating systems such as air source heat pumps. Kick-starting ‘whole-house’ retrofit projects across the capital – through the Retrofit Accelerator (launched in February 2020) which advises London Boroughs and housing associations on retrofitting buildings to reduce their carbon footprint and increase efficiency. The Plan predominately places the onus on London Boroughs to develop more detailed policies in line with the principles underlying sustainable design and construction, as well as increasing the requirements on developers of new schemes which can be secured at the planning stage. However, the Mayor has made it clear – particularly within his 2018 London Environment Strategy and in recent comments regarding the Government’s Future Homes Standard Consultation – that without the devolution of more powers from Central Government, London Boroughs will be held back on implementing policies which set higher energy efficiency standards for new homes and as such, the capital will not meet its net zero target. What are the London Boroughs doing? Since the Mayor’s December 2018 declaration of a climate change emergency, 29 of the 33 London Boroughs have followed suit and passed their own ‘climate emergency declarations’. A variety of targets in respect of reducing council-generated emissions have been adopted and while the majority have set a target of net zero emissions by 2030 – two decades ahead of the national government goal, some such as Tower Hamlets have set ambitious targets of becoming a carbon neutral Council as early as 2025. So what are London Boroughs doing so far? Islington Council, in partnership with TfL and engineering firm Ramboll, have developed ‘The Bunhill 2’ Energy Centre which extracts hot air from the Northern Line’s tube tunnels and provides heating and hot water for hundreds of homes and several public buildings in the borough. This ‘first of its kind’ system reduces carbon emissions and air pollution as well as lowering heating bills. Earlier this year, Tower Hamlets Council became the first London borough to rubber stamp a road made partly from old recycled tyres that would once have been destined for a landfill site. Other boroughs have focused on the aspirations and recommendations of their residents on how to tackle the crisis. Last year, Camden Council hosted the UK’s first Citizens Assembly on the climate crisis, allowing residents to consider evidence and develop proposals for practical action including making all new buildings zero carbon and installing solar panels on as many homes as possible. Camden introduced their ‘Solar Together’ group-buying scheme which enables Londoners to install solar panels on their homes at an affordable price – supported by the Camden Climate Fund. Although these examples demonstrate proactive steps taken by some London Boroughs, the majority are still only in the early stages of developing climate action plans and establishing their way forward. Recognising the severity of the climate crisis and committing themselves to reducing the causes is the first step, but it is important that these aspirations, whilst timely and valiant, are translated into effective policy and on the ground change. Whilst the London Plan sets out net-zero carbon home standards and how, through planning control, LPAs can potentially require developers to demonstrate how their proposals reflect carbon neutral objectives, few LPAs can show that their planning policies are designed to secure their area’s contribution to the full decarbonisation of the UK. This can lead to a situation where officers have no clear guidance as to whether proposals are consistent with the borough’s net-zero carbon plans and this can leave a substantial gap between planned policies set out at national or regional level and action at the local level. Climate change mitigation is therefore a vital component of wider planning and infrastructure policy that should not hinder the delivery of climate objectives at the local level. The CCC recommends that the Government should incentivise, support and enable local authorities to deliver emissions reductions and climate adaptation measures at a local level as ultimately, without adequate local planning systems and policies, it will be more difficult to progress zero carbon in practice.