The building bricks for residential towers across London are finally being laid, but not for sale, increasingly for rent, according to EG’s latest LOREMA report.
The report, published today, reveals that construction started on 47 residential towers in 2016, the same amount built in total between 2005 and 2012 and a 114% increase on 2015.
The majority of residential tower starts over the past five years have been around clusters in inner London, in Vauxhall, SW8; Elephant & Castle, SE1; City Road, EC1; Aldgate, E1; the Isle of Dogs, E14; and Stratford, E16. However, more recently both planning applications for and construction starts of towers have been pushing further out.
Residential towers in zone 1 are rare, according to EG analysis. Last year more than double the amount of towers were submitted across zone 5 than there were in zone 1 – 13 and six respectively. Some 31 towers were proposed in zones 4 and 5 last year, almost as many as across inner London (zones 1 and 2) as a whole. This reflects a steady shift of tower development out of central London over the past decade, says EG researcher Paul Wellman.
There are anomalies in both 2008 and 2012, however. In 2008, at the height of the credit crunch, not a single tower was proposed in zone 1 – the only year this has happened. The reverse was true in 2012, when the world was focused on London as the host city of the Olympic Games. During that year there were 28 towers submitted in zones 1 and 2.
Towers are overwhelmingly being built in London’s opportunity areas, with tall residential buildings proposed in all but four of the 38 areas. Just Bexley Riverside and Bromley, both south-east London; Kensal Canalside in west London; and King’s Cross in central London are without a proposed tower. Of the 567 residential towers that have come through the since 2002, only 56 are not in an opportunity area.
“The GLA’s plan to concentrate tall buildings within growth areas seems a resounding success, with 90% of all towers within one of the 38 opportunity areas,” says Wellman.
He adds: “However, just five opportunity areas account for more than half of all tall residential buildings proposed over the past 15 years: Isle of Dogs, Lower Lea Valley & Stratford, Greenwich Peninsula, Vauxhall, Nine Elms & Battersea, and the City fringe.”
Almost 9,500 new homes in towers of 20-storeys or more started construction in 2016, a whopping 72% increase on the year before. Included in that figure were almost 1,300 affordable homes – more than the total for the 2008-2012 period. Is London mayor Sadiq Khan’s 50% affordable homes demand starting to have an impact?
Perhaps most interesting is the tenure that new resi towers are being built for. According to LOREMA, more than a quarter of towers granted consent last year were for the rental market, up from essentially none a few years ago.
“Going forward it is for rent and not for sale, which residential towers will be increasingly coming forward for,” says Wellman. “Don’t be surprised if many towers currently in the pipeline that were originally planned for the sales market revert to being for the rental market.”
