Build to Rent has the ability to make a real difference to London’s housing needs, providing purposefully designed properties for rent with strong management, and a high quality customer experience. Increasingly, the Greater London Authority and local authorities are recognising the potential of this distinctive private rented sector (PRS) offer, as well as investors and developers.
On 15 June, Future of London organised a field trip to Ealing to explore the borough’s PRS strategy, and visited two schemes with different PRS offers.
The Rehearsal Rooms, North Acton
Currently under construction, the site is on brownfield land and adjacent to North Acton station. As a joint venture between developer The Hub Group and funder M&G Real Estate, this scheme will deliver 152 flats for private rent, 20 of which are at discount market rent (DMR). We heard from Dave Baptiste, Ealing’s Head of Housing Development, about the borough’s overall housing strategy, and from Steve Sanham, Development Director at Hub Group.
Overview of PRS in Ealing
Ealing is a pro-development council that sees the potential of cross-tenure and affordable developments. The council has recently granted 1,300 PRS units planning approval (including the Rehearsal Rooms). With buying in the borough out of reach for most residents, the PRS is seen as a more affordable tenure. Across Ealing’s PRS portfolio, at least 30% of units are at discount market rents (DMRs) and the council seeks a minimum 20-year covenanted period. Ealing’s DMRs are calculated as 30-40% of the average income in the borough, around £32,000pa. This makes renting in Ealing an affordable option for the ‘squeezed middle’ who are unable to buy and do not qualify for social housing. The borough negotiates with developers with the local need and DMRs in mind, whilst understanding that market rent and homes for sale need to be part of the mix for viability purposes.
The Rehearsal Rooms scheme
Hub Group focus on mid-market London, and deliver homes for sale and rent in well-connected locations that are less developed as residential areas. They currently have five projects in outer London.
The Rehearsal Rooms is a fully rented block designed by Newground Architects, comprising 152 apartments with two retail units on the ground floor. Flats will have generous living space, balconies, and equal-sized bedrooms, each with access to their own bathroom. Communal facilities will include a function room, roof terrace and allotments, reception area and lettings office and storage facilities. Hub Group bought the Rehearsal Rooms site with planning permission already granted, and negotiated a change to the original affordable housing provision from 13 affordable rent and seven shared ownership units to 20 discounted market rent units. Hub are currently seeking planning permission to add three more storeys to the existing blocks, half of which would be at DMR.
Copley Close, Hanwell
At our second stop, Copley Close, we heard from Wendy Stokes and Rosemary Bell, both working for Ealing’s council-owned housing company Broadway Living. Wendy helped set up the company, while Rosemary advises Broadway Living on the management of its PRS products and manages its Build to Rent flats in Northolt.
Copley Close is a mile-long linear estate undergoing renewal, involving refurbishing 550 homes and building more than 200 new homes; 76 of the latter are build-to-rent, managed by Broadway Living.
Wendy explained that Broadway Living was born out of Ealing council’s aim to keep ownership of assets and sites where possible. The company is “another tool in the box” for Ealing to develop homes, enabling the council to build beyond the financial constraints of its Housing Revenue Account.
Broadway Living’s primary focus is to build homes for rent and sale. The company also functions as an S106 partner, providing DMR homes on schemes such as Copley Close, Perceval House, and Greenford. The company borrows from the council, which provides equity, then the company lets the properties and repays the council. Ealing benefits from the increased supply of new homes, and once schemes are up and running, dividends and lease payments go directly to the council, providing a sustainable revenue stream.
Rosemary provided tips for council-owned companies managing PRS:
- Council schemes cannot be simply transferred to PRS because the systems such as those used to interact with customers differ; management systems must be integrated
- An online presence, such as a website and tenant portal, are useful for the customer, and reduce personnel costs
- Transparency and minimal additional fees improve the customer experience
Future of London’s next Build to Rent field trip is 17th August to LB Barking & Dagenham. To register interest, please email email@example.com.