Purpose built: build-to-rent is booming as the majority of Londoners predicted to be renters by 2025

The new build-to-rent sector is booming in response to the needs of Generation Rent, who cannot afford to buy a property in London.
Sweet: the Duke of Westminster’s Grosvenor Group plans to build 1,500 homes for rent on the site of a disused biscuit factory in Bermondsey
Ruth Bloomfield5 October 2017

The number of London homes built-to-rent has exceeded the 50,000 mark, according to new research.

Mostly flats, the total completed, under construction or in the planning stage in the capital stands at 54,978, accounting for more than half of the entire UK sector.

In the past five years the plight of Generation Rent, stuck in rental homes and unable to afford their own property, has encouraged developers and investors to create new-build communities aimed specifically at long-term renters instead of buyers, including at East Village, the former 2012 Olympics athletes complex in Stratford, east London.

The shortage of new homes and the inability of younger potential buyers to pay for them is driving the demand for private rental property, with 60 per cent of Londoners expected to be living in rented accommodation by 2025, according to recent forecasts by PwC property consultants and advisers.

£2,005 a month: in Bradstowe House, Harrow, Hamptons International has a one-bedroom built-to-rent apartment available

This new sector is booming, according to the data produced by Savills for the British Property Federation.

Major schemes under way across London include 600 flats destined for rent in the second phase of the huge Zone 1 Elephant & Castle redevelopment.

The Canary Wharf Group, meanwhile, is building 611 homes for rent at its 60-storey Diamond Tower project.

Berkeley Homes plans to include 1,151 build-to-rent properties in its 3,500-home development of a disused Parcelforce depot in Newham. And the Duke of Westminster’s Grosvenor Group has announced plans for 1,500 rental homes on the site of a disused biscuit factory in Bermondsey.

The disadvantage of these new apartments is that they are too expensive for low-waged young Londoners, though they do provide a secure home for professional salary earners, from both home and abroad.

Most developments include electricity, gas, water bills and wi-fi. The rent offers security of tenure, long-term leases and conditions, well-designed flats with community facilities such as fitness centres, plus shared open space — often roof terraces — cafés, furniture packages and concierge services. However, high rents make it more difficult, even for professionals, to save for a deposit for a home of their own.

In Headstone Road, Harrow, Hamptons International is advertising a one-bedroom apartment for £2,005 a month, while Tipi London has a three-bedroom flat in the Alto building in Wembley available at £3,595 a month.

Ian Fletcher, director of policy at the British Property Federation, says that as the buy-to-let sector matures, it will offer a variety of rental options.

“Much like the hotel market you have got everything from Travelodge to the Mandarin Oriental,” he explains.

“There are companies like Fizzy Living which are aimed at people with a household income of between £30,000 and £40,000.”