I attended the Economic Research Council debate ‘Boom, Bust or Beyond your Means? A Debate on the Future of London Housing’ at Deloitte Real Estate in the City on Thursday. I was surprised the discussion focused mainly on build-to-rent market but this could go some way to increasing the housing supply. However for developers and investors, the model does not work in high value areas unless an incredibly long term view is taken.
It also failed to address the current fundamental problem of unaffordable housing across central London.
Amongst the speakers was Simon Harding-Roots talking about Grosvenor Estates’ mixed-use development in Bermondsey. The development will create 800 homes. Grosvenor have always been in the market for the long term and is a proven business model, but one that is unlikely to work for developers hoping for short term higher returns in higher value prime locations
Michelle Hannah, an associate of Cast Consultancy, explained there is usually a 15% difference between build-to-rent and build to sell developments. This gap, which justifies long term build-to-rent schemes, increases significantly in high-value areas.In our
In my opinion, it would take a big fall in land values to encourage a bandwagon of build-to-rent investment.