In many countries such as the US, Germany and France, purpose-built blocks of rental homes are commonly found. In Britain they are a relatively new phenomenon, but are fast becoming a hot investment for property developers and city firms such as Legal & General, which are eager to tap into the rising trend for long-term renting. The sector is expanding throughout England, with 80,855 Build to Rent homes either completed or planned, according to recent official figures.
Quintain’s Wembley Park development, which will include 5,000 purpose-built rental homes, is the biggest build-to-rent project in the UK, worth £3bn. The 85-acre site is due to be completed in 2025-26, about 15,000 people are expected to be living and working on the site. Currently, more than 1,300 homes have already been built and a further 3,000 are under construction. The tallest tower will be 26 storeys, but not high enough to look into the stadium. Most of the planned 63 new buildings will have roof gardens, office buildings, a primary school, a theatre, health facilities and a park the size of four football pitches is planned.
The rent will include utility bills and ultra-fast broadband. Communal lounge areas adjacent to the entrance come with kitchenettes and Sky TV; there is a residents’ gym and screening room and a concierge is on hand 24 hours a day to deal with deliveries and emergencies.
Quintain however does admit that many tenants will be “paying a premium for the lifestyle,” but it says 32% of the planned homes at Wembley Park will be affordable. This is a higher proportion than seen at many other London developments, and just below the 35% target set by the city’s mayor, Sadiq Khan - down from his election promise of 50%.
The borough, Brent, is one of London’s poorest but nearly 40% of the affordable Wembley Park homes will be let at a discount (in comparison to market rents), with the maximum rent set at 65% to 80% of market value. A further 28% will be at an affordable rent and 33% are earmarked for shared ownership and discount sales.
Brent supports the mayor in seeking a minimum of 35% affordable housing on all new developments. It delivered 30% in the three years to 2015-16, above the 24% London average, according to a council spokeswoman. “We expect to see Quintain construct 3,000 new homes by the end of the year. This can only help to tackle the dire housing situation in London,” she said.
The government will be holding a referendum on UK membership of the European Union on 23rd June 2016. The effect that this will have on real estate in the UK and the rest of the EU is very much conjecture. However, it is highly unlikely that the outcome of the EU referendum would cause the UK housing market to freeze as a whole. In the first quarter of 2016, any uncertainty regarding the EU referendum has been off-set by pressure from those looking to beat the stamp duty deadline in April related to the 3% stamp duty surcharge on second homes and buy to let properties. The impact is proving to be more intense in the second quarter of 2016 as we approach judgment day. Remaining in the EU will likely result in a stabilisation of the market and we will see the usual influx of wealthy international students in August/September, along with an increase in international corporate tenants. If we leave, on the other hand, we are likely to see a significant period of market destabilisation whilst new international trade agreements are negotiated, with a time frame for tying up such new agreements being up to two years. Further long-lasting uncertainty in the in the UK economy is unlikely to be offset even by the possibility that of the pound becoming weaker and London investment therefore more appealing to overseas buyers.
Regardless the outcome, once the uncertainty clears there will continue to be a market, although possibly more focused on required, as opposed to non-necessary, demand caused by such factors as divorce and the need to up- or downsize.