Growing interest in London’s Private Rented Sector (PRS) from pension funds and other institutional investors is enabling the delivery of high-quality, purpose-built market-rented homes managed by single operators. A recent survey of institutional investors by Knight Frank indicated that by 2020, they would commit a total of £50bn to Build to Rent projects nationally.
From a public-sector perspective, these properties should meet local need, align with average incomes, contribute to affordable housing targets – and bring in a revenue stream. These factors are reflected in planning decisions as well as in the types of developer and/or investor a council chooses to work with. In some cases, boroughs are choosing to develop and manage their own version of Build to Rent, thus keeping more control in-house.
On 17 August, Future of London organised a field trip to LB Barking & Dagenham, to explore the rental options Barking town centre is offering to meet strategic housing and town centre regeneration objectives. The visit was led by LB Barking & Dagenham’s Dubravka Polić, Senior Regeneration Professional, Major Housing Projects, together with David Harley, Economic Development and Sustainable Communities Group Manager.
Barking’s Town Centre Action Plan (2011) aims to provide a wider choice of good quality, good value homes. The borough values and supports Build to Rent as it has the ability to bring forward development quickly, whilst diversifying housing options and providing well-designed and managed homes for rent.
The council is a facilitator of commercial Build to Rent schemes by providers such as Grainger and Be: here, offering high-quality market-rent homes to those with a degree of disposable income, and supporting the local economy. In addition, the council is a Build to Rent developer/manager itself, providing discount market rent homes. The council’s own homes are built through its company BD Reside, and often house local people.
The first Build to Rent scheme in the borough, Abbeville Apartments, was developed and is managed by Grainger. Other recent developer-led Build to Rent properties in the borough include:
- Barking Wharf, which was granted planning approval in April 2016. Developer Be: here will provide around 600 homes.
- The redevelopment of the former Abbey Sports Centre site by developer Lindhill. This is about to go to planning for 150 homes, as well as an independent cinema, commercial units and a home for healthy ageing innovation centre Care City.
BD Reside currently provides 621 Build to Rent units, with a further 180 under construction. Properties are offered at a range of discount market rents – generally a combination of 65%, 75% and 80% of the market rate – effectively bridging the gap between social (40-50% of market) and market-rent homes. The properties are open to anyone whose income falls between the minimum and maximum thresholds. Priority is offered to people already living or working in the borough, and to those in employment.
The group visited two BD Reside schemes – William Street Quarter and Abbey Road – as well as the Gascoigne East estate, a major estate renewal scheme with a large rental element.
William Street Quarter
This award-winning scheme by BD Reside has delivered 201 high-quality affordable rental homes for singles, sharers and families in the local area. The one-, two- and three- bedroom apartments and three- and four- bedroom houses are within walking distance of the town centre. The scheme was funded by private investor Long Harbour, with agreement to hand ownership to the council after 60 years. The homes were built by Laing O’Rourke using off-site modular construction methods. The balconies and concrete superstructure, floors, and cladding panels were manufactured off-site and assembled on arrival.
This is the borough’s largest estate renewal scheme, in partnership with housing association East Thames Group and designed by Levitt Bernstein. Recently rebranded Weaver’s Quarter, the scheme is funded by a European Investment Bank loan of over £60m. Phase 1 will provide 491 homes due for completion in 2018, nearly half of which will be at intermediate rents between 60% and 80% of market. The scheme is responding to Barking’s rapid population growth, replacing original homes while building two new schools on the site. The units are tenure-blind, where there is no visible difference between units charged at different rates, and the overall design priorities are improving legibility and permeability.
This scheme, within Barking’s creative quarter by the River Roding, consists of 56 one-bed, 53 two-bed and 15 three-bed flats over two sites. It was developed by the council using a £130m loan from the European Investment Bank, and is operated and managed by BD Reside. Rents are 80% of market (currently £960 per month) and priority goes to Barking & Dagenham residents in employment. Since the homes were released in October 2015, demand has been high.
Through its facilitation of private schemes and the development and management of its own offer, LB Barking & Dagenham is providing a range of rental options, whilst revitalising Barking town centre. In developing its own products, the council is taking considerable risk, and raising sufficient revenue whilst providing intermediate housing is a delicate balancing act. That said, the use of good architecture and innovative construction methods is producing impressive results. Tied to its other town centre regeneration efforts, the borough’s Build to Rent effort is creating an appealing offer for existing residents and newcomers alike.