Spotlight: North East London

North East London
 
Looking ahead

16 November 2017, by Savills Research

The key to successful development in North East London will be in understanding the demographics and what the region has to offer, while delivering products that will maximise future demand

 

Future delivery

We expect 29,000 private homes to be marketed in the five boroughs over the next five years. However, there are sites with capacity for a further 100,000 private homes identified. Investment in infrastructure and providing a wider range of tenures will be needed to unlock development or speed up delivery on these sites.

The spread of North East London from urban centres in Newham and Waltham Forest to more suburban locations in Havering and Redbridge means there are opportunities to target different demographics and price points.

Who will be buying?

There is likely to be sustained demand from young professionals moving to more affordable areas out of central London and looking to be close to infrastructure. The majority of upcoming supply is concentrated around train stations as well as potential infrastructure improvements to target this future demand.

With lower than average house prices, North East London benefits from the availability of Help to Buy, opening up home-buying opportunities for those struggling with raising a deposit. There is further capacity for the use of the scheme in some boroughs that have seen lower take up – just 21% of Redbridge’s new build sales used Help to Buy in the year to March 2017, compared with 81% in Barking and Dagenham.

Even in the more suburban markets, affordability is likely to be the driving factor in demand from families upsizing. Using CACI data, we know Redbridge and Havering both have more than one-third of households classed as families and, for both of these boroughs, the largest proportion of residents are moving from Tower Hamlets.

Alternative tenures

An opportunity presents itself in the form of alternative tenures that attract multiple demographic groups facing affordability pressures. Institutional investment in purpose built rental stock is changing the approach to its design, with a greater focus on building efficiencies in order to reduce operating costs.

Schemes such as Grainger’s Abbeville Apartments in Barking have been successful in appealing to a wide range of renters, letting up quickly. It has attracted renters across a broad range of ages and a mix of families, singles, couples and sharers.

The bulk of build to rent schemes in the pipeline are, again, targeting key transport locations. More than 3,000 build to rent units have already been completed across North East London, with another 10,000 in planning. As confidence in build to rent as a development model has grown, so have the size of the schemes; 50% of completed schemes in the area are of more than 100 units, but 83% of the schemes in the pipeline are in excess of that size.

Co-location of uses

Co-location can be part of the solution in meeting the property requirements for the competing demands of residential, commercial and industrial uses across North East London.

Co-location of residential and office or retail is well established. In the early 2000s, for example, a 15-storey residential tower was built above an Asda store in Romford town centre. However, co-locating residential alongside industrial uses is still an emerging opportunity, with Barratt and Segro forming one of London’s first partnerships of this nature to deliver a site in Hayes.

Given the large amounts of industrial land in North East London, exploring this opportunity should be part of the solution to meeting the area’s development requirements without sacrificing much-needed industrial land.

It is more challenging to mitigate noise and activity levels from industrial units than it is from retail or office space. But developments such as the Travis Perkins depot at King’s Cross have shown that it can be done, particularly through innovations, such as using electric vehicles for delivery, or providing a covered yard.

Co-locating residential and industrial uses is a more effective way of maximising land use than trying to densify a solely industrial site, as occupiers still prefer single-storey warehousing.


The Elizabeth line

Creating new property hotspots in North East London

 

 

FIGURE 4

Development around stations* Young professionals want convenient access to work. Our research shows which stations along the Elizabeth line have the capacity to deliver the most private homes

 
Figure 4

Source: Savills Research, Glenigan, Molior, Land Registry | Note *Within 1.5km radius

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