Today I have been talking about the rental market at this year? Sold out the National Residential Investment Conference, held each year in London.
Among other topics in the spotlight during the course of the day, was JLL?s recent research on the institutional (non-Housing Association) sector. Here are some key facts and figures. Having analysed seven residential developments comprising 911 units with an average scheme size of 130 homes, JLL reveals that average gross to net is 26.6% with an average rent premium of 9% for high quality build-to-rent developments and 3% rental growth.
The average tenant age across these schemes was 31 years old, achieving circa 30% more than the mean UK salary. Tenants were prepared to pay to be in a BTR or multi -family scheme and were not over extending themselves with rent to income at 28%, compared to the UK over-burdened rate of 40%.
JLL also identified these net initial yields:
Urbanisation remains the trend, with 4bn of world's 7.5bn now living in cities.
The conference also threw up some interesting statistics on the changing nature of UK households.
The number of people getting married is on a downward trend. In tandem with this, the average number of children per couple is reducing and people continue to start their families later than previous generations. The knock-on effect of all this, is that two thirds (or 17 million) of UK households do not contain children.
In terms of future property provision, this means that what the UK needs are more homes suited to couples with no children, retirees and single sharers. As a result, we anticipate that micro-living solutions and co-living will get more air space going forward.
The Collective at Old Oaks is one of the first purpose-built co-living developments in the UK.
So what is micro-living, I hear you say. Isn?t that just an HMO? Rightly or wrongly, for most of us HMOs tend to conjure up badly converted, poorly maintained housing stock - not the purpose-built, thoughtfully designed new spaces now coming on line. The Collective at Old Oak is a good example, although arguably it could be termed student accommodation for grown-ups!
So the answer is surely not more HMOs, but rather well-designed spaces concerned largely with common, outside-the-apartment space. This puts me in mind of 1930s mansion blocks with their own restaurant and no individual kitchens to speak of.
At Ringley we manage some of these, which ? without all the original amenities that have gradually been lost over time - are now often just cramped flats. I trust in future these shared spaces will be better designed and the 'outside-the-home? spaces will be more about living than eating.
Mary-Anne Bowring FIRPM FRICS FARLA FCABE Founder/Head of Asset Management
Strategic partnerships, holistic delivery/ opportunities, growth, value engineering, thought leadership
Ian Barber MD BTR Mobilisation & Leasing
Runs HQ & site lease-up teams. Drives rent pricing, mobilisation, marketing, happy residents!
Jon Curtis MRICS Head of Building Engineering
Chartered Building Surveyor. Lectures on EWS1 & building safety. Runs CapEx programmes.
Kate Robinson MIRPM MD Blocks/FM Management (London Region)
Master plan setup, ops and staffing and resident engagement. ISO45001 champion.
Lee Harle Partner Ringley Law
Plot conveyancing. Debt litigation. Group Company Secretary.
Anthony Kingdon MIRPM AssocRICS MD Blocks/FM Management (North Region)
Stakeholder engagement. Mixed tenure specialist. Budget management. Plant audit, PPM compliance.
Chris Georgalis MRICS Head of Commercial Valuation
Chartered Valuer. Rental valuations: retail, leisure. IRR modelling and valuations for secured lending. Compulsory purchase & rent reviews
Nichola Pughe MRICS Head of Residential Valuation
Chartered Valuer. Rental development & mixed use valuations, IRR modelling. Leasehold enfranchisement specialist
Libby Chen MSc Compliance Manager
Operational Plant & Equipment strategy PPM Compliance lead, Asset tagging Client major projects
Dipesh Parekh Director PlanetRent
Customer centric, vertically integrated PropTech/fin-tech solutions.
Leana Aristodemou MIRPM MARLA AssocRICS Strategic lead: ESG & Asset Business Plan delivery
Financial modelling, valuation analyst to support underwriting & fund reporting.
Natalie Birmingham Helpdesk Support Manager
Trainer & Helpdesk Manager: people, systems,contractors. ISO45001 supply chain accreditation.
Steve Norman Planning Director
Land due diligence (opportunities & constraints) Has contributed to a number of award winning schemes.