The UK’s housing problem is a story well told, but what about the UK’s living problem? While figures about the consistent failure of governments to deliver on housebuilding targets dominate the headlines almost every day, the country is also facing a supply issue when it comes to student housing and later living accommodation.
But, concluded a panel of experts speaking at EG’s debate series at UKREiiF last month, a more joined-up approach to the living sector as a whole, and recognition of how it is a key driver in the regeneration of place, could help tell an entirely different story.
“We have a fundamental undersupply of housing in this country,” said Amy Crick, head of London, UK real estate at Barclays Corporate Banking. “We have missed the target of 300,000 new homes per year by more than 33% for the past decade.”
Add in migration figures, she said, plus divorce rates, and how rapidly the ageing population is outpacing the development pipeline, and soon you have a number that tops 500,000 homes a year.
Delivery crisis
The numbers are stark, and targets are not going to be hit without a different view of the living sector – a more long-term, more collaborative and more innovate approach to solving what Crick said has developed from a housing crisis to a housing delivery crisis.
For Mike Auger, managing director of Muse’s South region, the solution will come from harnessing the multiplicity of different living uses across major regeneration schemes. He believes that to achieve the scale and pace that is necessary for proper placemaking and to deliver the tenure of homes needed, a variety of living products is vital.
“The multiplicity of the living sector is great because it allows us to do things at pace,” said Auger. “We all see the power of creating a community, but you can do more simultaneously if you’re doing true multi-generational living.
“The problem at the moment is that, as a developer, it is still a bit siloed. But the more the larger investment organisations, supported by the banks, can adopt a fluid approach across those sectors – whether it is student, co-living, build-to-rent, single-family or later living – the better.”
He added: “As a developer, to align your stars, and your building contract, all at the same time for potentially three or four different uses is really, really difficult, so the more capital there is that can look more holistically across the living sectors, the more we can do at scale, and the more chance we have to tackle that housing shortfall.”
Public sector partnerships
It is not just capital partners that are key, said Richard Beckingsale, head of regeneration at Gowling WLG. Good partnerships with local authorities are also vital in unlocking the power of living to deliver place.
“The public sector has a key role to play, both as a landowner with the ability to determine what happens on its land assets and in giving a clear vision and guidance to developers that are looking to perform that partner role,” said Beckingsale.
“It is important that planners and landowners understand the viability of these different housing models,” he added. “The same goes for investors too. We have heard a lot about the amount of money that is clamouring to get into the living space in its various forms, but each of these products is unique, and at the moment there seems to be quite a fragmented approach to the way they are being assessed and invested in.”
Beckingsale shared a couple of examples of how partnership and playing the long and patient game can enable delivery. He pointed first to Brent Cross in London, where some £300m-400m of public investment has been ploughed into the development.
While homes coming out of the ground on the scheme may only just be starting to be seen, he said a brave and bold investment from Barnet Council to help deliver vital infrastructure has been an enabler of growth, with Sheffield Hallam University wanting to open a campus in the area and purpose-built student accommodation being added to the mix, along with BTR and affordable housing.
And in Sutton, south London, a new cancer hub – slated to be the third-biggest cancer research facility in the world – has brought life sciences and housing delivery together to regenerate the area.
Thread of life
Barclay’s Crick was keen to ensure that the whole of the industry took its responsibility to support the diversity of product across the living sectors seriously.
“We have to be open to new initiative and new ideas to solve the housing emergency,” she said.
CBRE director Riah Patel said that focus on the whole living offering is starting to be taken seriously, and that more and more investors are seeing a thread from student, to rental, to housing, to later living.
“A lot of investors are setting up funds that look across the living sector, and I think that movement is really helpful because, at the end of the day, a lot of this is around living experience,” she said. “If you’ve had a good experience living in student accommodation with one operator and they have a BTR or co-living plot next door, that is going to carry through.”
But, unfortunately, it is not simply a case of “if you build it, they will come”. Policy needs to change, partnerships need to get stronger and the sector needs to think both holistically and futuristically about what living experiences the populace will need going forward.
“If we can’t build then we can’t deliver,” said Auger. “It is not just about volume. It is about earlier partnering, forging longer-term relationships and building better. It is about building homes that in 50 and 100 years’ time are the sort of homes that we need. How many homes did we build 50-70 years ago that are now not fit for purpose? Let’s not do that again.
“We need more skills, and we need more partnering between developers, investors, contractors and government to invest in those skills, not just to achieve volume but to deliver the right sort of homes.”
“We need long-term policymaking in housing to drive us forward,” concluded Crick. “We need to have a supportive regulatory environment and regulatory capital that supports growth – and maybe some tax incentives. Those things together will really drive development forwards.”
The experts
- Michael Auger, managing director – South region, Muse
- Richard Beckingsale, head of regeneration, Gowling WLG
- Amy Crick, head of London, UK real estate, Barclays Corporate Banking
- Riah Patel, director, CBRE
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