The only way is not up

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The only way is not up

News : Public Property

Could a low rise approach to the rental market play a part in solving the UK housing crisis? Dominic Martin explores what could be learnt from the US housing sector.

Ever since Dolphin Square was built in the 1920’s, the first purpose built residential development for rent, high rise urban rental living has been an integral part of inner London as well as in parts of other cities across the UK. And we are now seeing the emergence of newly constructed well designed apartments and buildings, within a new residential asset class for rent, neatly referred to as ‘build to rent’ – BTR.

As the UK’s housing sector creaks at the seams, BTR is now providing nearly 16,000 completed units across the many large towns in and cities in the country, as well as a further 67,000 in either construction or planning. BTR can be (and is) part of the solution to alleviate the housing crisis.

Yet much of the attention and activity to date has so far been centred on high rise living, with most of the BTR schemes in London, Manchester and Birmingham, including Atlas’s own projects in Manchester, Birmingham as well Southampton. But high- rise steel and glass towers aren’t for everyone and have a natural focus and draw to city workers and millennials. For those that rent and wish for a more suburban lifestyle, in particular families, the BTR sector has yet to consider this. The only way is certainly not up!

To that end, we can learn some interesting lessons from the US housing sector. Whilst there is a high rise urban living culture, which has been well covered by UK proponents of the BTR sector, the US market is in fact dominated by ‘garden style’ low rise apartment living. These ‘stick and brick’ apartment communities are mostly two and three storeys in height and are the favoured rental option for many middle income ‘grey collar’ American families.

This low rise approach to rental accommodation forms the backbone of the US rental sector – as well as of Atlas Residential’s US portfolio. Yet the concept is one that has received little attention in the UK so far.

Every family should be able to purchase their own home and quite simply, the UK needs to build homes at scale – there are no illusions there. Those homes need to include major urban extensions but within those, housing across every tenure and type, including consideration of those families that rent. From 2001 to 2011, the number of household renting in the 25-34 age group grew by 75%. Yet for the 35 to 64 age group, this sector grew by 95%.

With the NPPF now recognising the build to rent sector and the promotion of its inclusion within Local Plans, the debate should widen from not just the high rise, to include low rise housing types. That means we need to open a dialogue about what high quality housing for families who rent should look like.

Regional towns and cities are particularly well placed to take this concept forward. They can take a fresh approach to suburban planning, borrowing from the examples we see working so successfully in the US. With low rise build to rent communities, and as part of a wider blend of housing tenures, families have the option to enjoy greater shared garden spaces and amenities such as an on-site crèche, tennis courts, and outdoor play areas, yet without the headache of having to maintain those facilities themselves.

Furthermore, single family homes can, in fact, be very inefficient in terms of their design and space consumption. 150 individual homes could accommodate 200 units in low rise apartment blocks, but with the shared club house external amenities. It’s about carefully crafting the use of space, mixing that with facilities that people both want and need, without compromising on the residual land value. The result is a development that appeals to those who will live there and that allows for operational efficiencies within the development sector.

Nor is it just about play parks for young children. We need to look beyond traditional rental models. It means offering three-year tenancies, to provide certainty for longer term residents, or taking a welcoming approach to pets, in line with a realistic view of what the UK’s families need from their homes.

It important though that any consideration of BTR must be tackled with an ‘operational’ spirit – this isn’t about throwing up a few apartment blocks and the management can follow thereafter. Access and convenience for the consumer (including parking and refuse), as well as for the operational teams is important. And broadband and utilities need to be thought about up front, with technology incorporated appropriately.

For Atlas, these properties can range in size from 300 units to 900 units and a great deal of thought and planning goes into running these. These estates need to be staffed and a central hub and club house created as a focal point. It is about ensuring the estate is efficient to run.

Of course, for those local authorities considering building homes themselves, but perhaps not so keen to sell off all of the family silverware, the BTR tenure can form part or all of this new housing stock too.

A final consideration is that low rise apartment living must make financial sense for all parties. Low rise developments are less expensive to construct than their high-rise counterparts and in the face of rising construction costs and the ongoing viability debate, as well as the push into modern methods of construction, this is an important consideration. And the knock-on effect on renters is that with a reduction in development costs, the lower the rents can be.

If we are to meet the needs of UK renters over the coming years, low rise rental apartments need to form part of our thinking. As a nation we need a blend of tenures and house stock types, to take account of shifting demographics and the changing shape of the rental market. More families are renting for longer before being able to purchase their own home and the sector needs to acknowledge and cater for this.

It’s time to broaden our housing horizons and step up to meeting the needs of our future renters.

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