The profile of London renters is changing significantly. Far fewer renters are single and transient. Sixty-eight per cent are working professionals or in full-time education, 20 per cent have families, and 16 per cent want homes for longer than 12 months, according to private rental developer Essential Living, which has apartment schemes under way in Whitechapel, Archway, Deptford, Croydon, Canary Wharf and Swiss Cottage.
Home ownership, it says, has hit a 25-year low, while private renting has risen from 2.2 million in 2002 to more than four million today, amounting to more than the number in social housing. A quarter of all households in London rent privately.
Demographics are changing, too. People are starting families much later, so the average first-time buyer age is creeping up — from 27 in the Eighties to 36 now.
149 homes in two blocks: Three Colts Lane, an Essential Living rental development in Bethnal Green (essentialliving.uk.com)
There are also more single households now, with economic migrants, divorcees and students — all groups that tend to rent rather than buy — boosting the number of renters.
In cities such as Paris, Berlin, Brussels and Amsterdam up to 60 per cent of households rent privately, which is a far higher percentage than in London. Advocates of a European-style rental market say renting allows people to live in a better property in a better district than they could afford if they were buying — perhaps in a sought-after school catchment area, or a posh postcode in central London.
Get Living London, a “new-era” rental service at East Village in Stratford, the former Olympic Village, brought more than 1,400 new homes with tenant-friendly contracts and a package of extras. Its success has spurred developer Delancey to create a new set of houses across the river at Elephant & Castle.
Wembley in north-west London is to be another rental hub. Around a third of the 5,000 homes in Wembley Park, a new district ringing Wembley Stadium, will be for private rental, typically costing £1,500 a month, according to Quintain, the developer.
Today’s new corporate landlords are convinced the rental boom is here to stay, pointing to a cultural shift in society. They have set out to change the image of renting — still plagued by confusing and inflexible contracts, aloof landlords, hidden costs and poor maintenance — and aim to offer a service akin to a mid-market hotel chain, with set “room” rates, standardised interiors and a menu of free and paid-for extras so tenants know what they get.
Success story: a two-bedroom flat, above, at East Village in Stratford, where 1,400 homes have tenant-friendly contracts (eastvillagelondon.co.uk)
Fizzing up renting
East Village, originally built for athletes competing in the 2012 Olympics, was named “best new place to live” in the Mayor’s London Planning Awards this year, while the Get Living London “brand” has won praise across the board for the high level of customer service it provides. East Village even has its own postcode — E20 — and during the next month will host big-screen free movies and events linked to the World Cup and the East End Film Festival.
Rents start at £340 a week for one-bedroom apartments and from £590 a week for four-bedroom townhouses for sharers and families. There are no service charges and the only extras are utility bills. The package includes free broadband and evening and weekend phone calls plus half-price offers on Sky TV, while furnished flats designed by Wayne Hemingway use iconic British manufacturers and brands such as G Plan.
Lewisham Gateway: the landmark development in Zone 2 includes 136 rental flats acquired by specialists Fizzy Living (fizzyliving.com)
In the zone
Zone 2 addresses close to train and Tube stations are the favoured locations for rental villages. Essential Living plans to include residents’ lounges, gyms, quiet spaces and business centres, screening rooms for movies and sports events, even laundry rooms.
Traditionally, private renting has been a fragmented marketplace, dominated by legions of individual landlords who owned one property or a small portfolio. Such landlords now face competition, while the emergence of rental villages also poses a threat to buy-to-let investors, who will have to cherry-pick properties more carefully.
Developers and big financial institutions are not only targeting rentals for long-term property investment, they are using economies of scale to improve the service and provide on-site management. For example, with hundreds of apartments at one site, it is cost-effective to employ a number of plumbers to service the development rather than call them out ad hoc.