Three London boroughs outlined their development dreams on the London stand at day one of MIPIM – Lambeth, Harrow and Hounslow. But can these visions be delivered? EG’s London Residential Research crunches the numbers and looks at what might be next for these boroughs.
Lambeth
Lambeth has hopes that a £490m housing investment in the borough will help to generate 32,000 homes and overcome what Sandra Roebuck, assistant director for strategic and neighbourhood investment, calls ‘not much housing stock’.
How quickly can this be delivered?
A total of 891 private homes were at application stage at the end of 2016, ranking the borough fifth in terms of application numbers in the inner London boroughs.
Nearly half of that total was supplied from three schemes:
■ Vauxhall Exchange, VNEBOA, (26 storeys) – formerly Lambeth College’s Stockwell site – an application was submitted in late 2016 by developers Lambeth College and Carillion for the redevelopment to provide 232 homes. In total, 213 would be for PRS build to rent, indicative perhaps of the growth of this asset class during 2016 as home ownership becomes increasingly non-viable for the average Londoner.
■ OCCC Estate, SE1 – another late 2016 application submitted by developer Grainger is set to deliver 215 homes, of which 138 would be for private sale.
■ Texaco Petrol Station, SE1, (25 storeys) – marking the return of Jon Hunt founder of Foxtons into the London residential market, this early 2016 application gained consent in 2017 for 166 homes of which 118 would be for private sale. In addition to 48 social housing homes a total of £9,986,000 towards affordable housing will be given.
The borough’s permission pipeline is dominated by some very large proposed developments which account for more than 60% of the overall permission pipeline. The three schemes that stand out are:
■ Vauxhall Square, VNEBOA, (50 storeys) – a total of 580 homes (454 private) have been consented, however this scheme developed by CLS is yet to start. There is development activity on site, namely the student housing element, being developed by Urbanest (who acquired the site from CLS), which is set to deliver 454 PBSA homes.
■ Nine Elms Tube Station, VNEBOA, (23 storeys) – OSD development is set to deliver 332 homes, with 248 private homes and 84 intermediate rental units. The developer is, not surprisingly, Transport for London which will use any profit from the development to help fund the Northern line extension project.
■ Grand South, VNEBOA, (36 storeys) – purchased by Alchemi in 2015 for a price understood to be more than £30m, this site has consent for 278 homes, 220 of which will be private with the remainder for social use together with an affordable housing contribution of £10,590,000.
So much for the future, what of the present? The answer to that was one of today’s panellists Marcus Bate, investment director at Mount Anvil and its Keybridge scheme.
This is a former BT telephone exchange and is located within the VNEBOA (Vauxhall Nine Elms Opportunity Area) occupying 3.3 acres (1.3ha). Bought by Mount Anvil in 2014 for £92.5m, it is now being developed as a JV between Mount Anvil and Fabrica (A2 Dominion).
The scheme has a total of 496 homes – 458 private, 38 social with 189 of the private homes being developed for the PRS (as we said previously an emerging asset class during 2016). The development has experienced strong sales with the majority of the development sold. Average asking prices circa £1m, average £ per sq ft circa £1,100.
Keybridge
| Min | Max | Avg | Min | Max | Avg | ||
|---|---|---|---|---|---|---|---|
| Beds | Unit sample | Price | Price | Price | (£ per sq ft) | (£ per sq ft) | (£ per sq ft) |
| 1 | 32 | £575,000 | £765,000 | £664,688 | £910 | £1,386 | £1,090 |
| 2 | 118 | £855,000 | £1,727,500 | £1,006,737 | £751 | £1,532 | £1,122 |
| 3 | 32 | £1,500,000 | £2,500,000 | £1,800,938 | £890 | £1,412 | £1,208 |
| Total: | 182 | £575,000 | £2,500,000 | £1,086,236 | £751 | £1,532 | £1,142 |
Average pricing details for the VNEBOA
| Min | Max | Avg | Min | Max | Avg | |
|---|---|---|---|---|---|---|
| Price | Price | Price | (£ per sq ft) | (£ per sq ft) | (£ per sq ft) | |
| VNEBOA | £445,000 | £14,495,000 | £1,189,858 | £751 | £2,710 | £1,257 |
The borough v all London capital values and £ per sq ft
| Average price (£/sq ft) | Average price (£’000) | |||||||
|---|---|---|---|---|---|---|---|---|
| 2013 | 2014 | 2015 | 2016 | 2013 | 2014 | 2015 | 2016 | |
| Lambeth | 710 | 800 | 1,042 | 1,261 | 530 | 614 | 838 | 1,073 |
| Inner London | 1,043 | 1,241 | 1,301 | 1,347 | 921 | 1,130 | 1,196 | 1,246 |
| Prime London | 1,987 | 2,091 | 2,159 | 2,177 | 2,445 | 2,569 | 2,758 | 2,662 |
| All London | 767 | 911 | 960 | 1,013 | 650 | 791 | 796 | 866 |
The discussion identified the two main areas of growth as Vauxhall in the west and the Southbank in the east.
However, it would be more realistic to visualise the borough’s main areas of activity as a ribbon or a corridor starting with Nine Elms in the west passing through Vauxhall, Albert Embankment, Lambeth Palace Road and culminating in the hefty full stop in the east which is the Shell Centre, now renamed Southbank Place.
This is a corridor of intense activity at the moment with much more to come in the future.
Harrow
Harrow has ambitions to unlock a £1.75bn investment programme to transform the borough by 2026. It is currently half way through the investment programme, £375m already invested in council-owned sites with a further £500/£600m currently at application or under construction.
Housing is not the only focus for the regeneration programme with aspirations for large mixed-use schemes. Harrow is keen to promote itself as the next key area for transformation in London, emulating what is currently happening in Croydon and Newham.
Harrow Council owns approximately a third of the land that makes up the Heart of Harrow Opportunity Area. In an effort to contribute towards a borough wide target of 5,000 homes by 2026, the council is looking to deliver 2,000 new homes with a number of private rented sector developments held and managed by a council-owned company. This will see them transform a number of council-owned sites, relocating and consolidating existing council buildings to free up land in prime development areas.
Towards the end of last year, Harrow Council submitted an EIA screening opinion for the current site of its Civic Centre on Station Road. The proposal outlined 880 homes with 301 for private sale, 353 social homes and 227 PRS homes, as well as commercial and community space.
There are a number of other council-owned sites, including Waxwell Lane, Vaughan Road car par and Byron-Quarter, which are currently going through rounds of public consultations that all share a similar theme of providing further council owned PRS homes. Harrow Council also has agreements in place with private sector developments to have units transferred to it, to add to its PRS offering.
It has an agreement in place to take 53 homes on a long lease from Fairview Homes’ development at the former Gayton Road Library site.
Data from EG’s London Residential Research’s LOREMA 4 2016, showed in Harrow there was a total of 62 private PRS homes at application and permission stage, and 104 private PRS homes under construction in the pipeline. This placed Harrow 12th out of 19 outer boroughs in total PRS homes in the pipeline. With council-backed PRS schemes beginning to move through the planning process and council-owned sites being freed up for development, we can expect to see an acceleration in the growth of Harrow’s PRS stock.
Hounslow
Hounslow, home to Heathrow and a growth corridor of residential stretching from the airport towards Central London. It is understandable why both Hounslow and Slough were keen to push the benefits of a third runway at Heathrow.
The map of residential schemes currently being monitored by the London Residential Research team shows a clear trend of developments along a ‘pathway’ from Heathrow Airport towards Central London.
London Residential Research is currently monitoring a number of key projects currently in the pipeline, including the High Street Quarter (permission for 527 homes – 311 private and 216 social), as well as the site of the former Hounslow Civic Centre, where demolition works have recently started (919 homes – including 551 private and 368 social).
As recently reported, Hounslow Council is taking a pro-active approach in delivering new residential and mixed-use schemes by establishing Lampton 360, Hounslow Council’s newly formed property development company. The focus is redeveloping surplus local authority land with residential and mixed-use projects in partnership with Willmott Partnership Homes.
Initially 11 council-owned sites have been identified that will provide more than 800 new homes, 40% affordable, 40% private sale and 20% for private rent.
Last week saw the first of Lampton Development’s sites brought to planning committee with Nantly House receiving planning consent. The scheme will provide 74 homes – 28 for private sale, 31 social and 15 PRS.
