Build-to-Rent and Bat Bricks: An overview of RESI 2018
From bat bricks to build-to-rent: this year’s RESI Convention, the industry’s premier residential conference and networking event was all about, debate, diversity and delivery.
The event, now in its 12th year, brings together the sector’s leading developers, landlords, house builders, housing authorities, investors and local authorities.
London cooling?
Lucian Cook and Lawrence Bowles, of estate agent Savills, kicked off the event, and talked about first time buyers, Help to Buy and the London property market. They informed us that:
- First time buyers have been the dominant growing force in the house buying market over the last five years, with home movers and cash buyers less so.
- House prices in London are cooling but are increasing in other regions.
- Average Help to Buy loan values are growing and is currently at an average of £160K in London.
Regarding Help to Buy, Lucian and Lawrence said that it remains a strong force, including in the market outside of London. When it was introduced in Q2 in 2013 it accounted for 1 in 6.4 transactions in England. But this has grown to 1 in 4.5 in Q2 in. 2018. Good news or not? The Savills team were of the opinion that this is not the cure for the current housing shortage. While an extension of the Help to Buy scheme is expected, it should be limited over a two year period, which will allow housebuilders to wean themselves off the current reliance of the scheme. As for the build-to-rent sector, Savills noted that it is maturing quickly and picking up some real momentum with a 60% growth of completions in the regions.
The focus then shifted to Housing Associations who have claimed that the availability of land is the key issue they face currently. issue according to various housing associations. Nevertheless:
- Homes England have formed eight strategic partners to deliver 14,280 affordable new homes.
- 38% of housing associations noted that they are very likely to work with private clients on joint ventures within the next 5 years, which is an exciting development for the industry.
More government resources required
In the next slot, an esteemed panel comprising James Murray, deputy mayor, housing and residential development, Greater London Authority; Natalie Elphicke, chief executive, Housing & Finance Institute; Tony Pidgley CBE, chairman, Berkeley Group; and Tom Walker, deputy chief executive, Homes England, also discussed the availability of land.
James Murray noted that the GLA are taking a much greater effort in resolving the issue of land supply. While Natalie Elphicke believes there is an over-supply of low-quality private rented sector housing, and too many tenants are getting a poor experience. She said the future product needs to be high quality, well managed, with more choice on the market.
It was also noted that more powers and resources are required at government level to build the amount of new homes required. Unlived-in apartments were also discussed, which, according to the panel, morally come under the same category as undeveloped land.
Build-to-rent to complement home working and tackle loneliness
In another lively panel discussion with Michela Hancock, development director, Greystar; Johnny Caddick, managing director, Moda Living, Alex Notay, Build-to-Rent Fund director, PfP Capital; and Andrew Saunderson, director of investments, Grainger, build-to-rent was very much on the agenda.
The panel agreed that build-to-rent properties need to take into consideration the increase in home working and need to provide a suitable environment. Johnny spoke about the importance of providing added value to customers such as gyms and high performing IT capabilities, which in turn offers a saving by default. While Michaela noted the importance of developers spending time in their completed developments with the tenants to understand what worked and what could be improved.
The importance of the build-to-rent market in tackling loneliness in the general community and amongst the elderly, was also discussed, and it was agreed that build-to-rent properties should be designed with this social issue in mind.
Addressing the wildlife housing crisis
Barratt Homes, in conjunction with the RSPB talked about how they set a new benchmark for wildlife-friendly housing in Aylesbury Vale District.
They noted that the hedgehog population has declined by 97%, with fewer than 1,000,000 left, and that there is now a ‘wildlife housing crisis’. By working closely with the local authority, Barratts created a wildlife environment within and around a significant housing development.
This scheme included bat and housemartin bricks, 60% green space, wildlife movement corridors and 800 swift bricks. There was also a move from bowling green verges to wildflowers. Something that is not uncommon in Europe but not common enough in the UK. Barratts also kindly provided house buyers with wildlife guides.
The scheme has proved wildly successful and the RSPB went as far as to say that the housing industry could be the saviour of wildlife in urban environments.
An exciting year ahead for the residential market
Overall, this year’s event was upbeat regarding the future of the sector generally, particularly the Build-to-Rent sector and the property market generally outside of London. However, land supply and achieving viability in the regions were often noted as a key challenge faced currently.
The suggestion that the authorities should address the issue of statutory services providers’ impact on development programmes gained widespread agreement, and I anticipate this to be more widely and openly discussed next year. It was widely acknowledged that the content at this year’s conference was of a high quality with excellent networking opportunities throughout, and quite possibly the best one yet.
Henry Riley look forward to supporting all of our current and future clients to greater success in what looks like an exciting year ahead for the residential market.
By David Ayres, Partner