What Kind of Housing Will ‘Generation Rent’ Be Able to Actually Afford?

An aerial view of a planned housing block in Thamesmead, southeast London (Image courtesy of Peabody)

While baby boomers sit on cash cows in Dalston – where property prices have increased by nearly 60 percent over the past five years – we, the so-called snowflake generation, are slowly accepting our fate as “Generation Rent”. One study last year found that only 26 percent of us are likely to own a home by 2025, and ominous headlines remind us that we won’t be able to start families due to the amount of money we’re spending each month on accommodation.

In response to this housing crisis, the UK’s seen a boom in the development of build-to-rent properties: homes which are made for the primary purpose of being rented long-term. There are two strands to this. In one, the state takes the lead with its build to rent project. On Monday the government confirmed plans for a multi-million pound deal that will see built-to-rent homes developed in Manchester, Leeds and Birmingham, while earlier in the year another 1,000 homes were planned for London. Sadiq Khan, the capital’s mayor, plans to hit a target of 42,000 homes built each year, with around 5,000 of them coming from the build-to-rent sector, according to British Property Foundation. The other approach for options for us potential never-buyers comes from businesses and housing associations – who look after mixed types of housing, including social housing – offering build-to-rent properties for tenants.

It’s looking like the best that those of us without a massive inheritance or family-funded deposit can expect is to rent long-term. The message being pushed at the moment appears to be along these lines: give up your dreams of home-owning. Accept your fate of paying for something on which you may not see a future return. Live in the moment. And if we’re set to become like the long-term renters of Switzerland, Germany and Belgium, these look like some of our options.

(Image courtesy of Hub Residential)

What is this? “Rehearsal Rooms” in Acton; an up and coming private build-to-rent scheme of one, two and three bedroom apartments which will be finished in February 2017 and is part of the so-called “regeneration” of Ealing.

Who runs it? Hub Residential property developers and investors M&G are partnering on this £43.5 million scheme.

What do they say about it? “It gives people an option that they haven’t got at the moment,” says Steve Sanham, the managing director of Hub. “There’s a big stigma for whatever reason about home ownership versus rental, and I think the millennial generation, inasmuch as it exists, may well want the option to be a little more fleet of foot.”

How much would a month’s rent be? Yet to be decided.

Is there a catch? At this stage, it’s too early to say. There’s been a wider argument over the Green Party’s perceived loss of social housing in Ealing, where they cited a figure of an apparent 1,094 social homes lost. Ealing Council pushed back, with a spokesperson telling the local press that “claims that Ealing’s regeneration projects lead to a reduction in the availability affordable (including social rented) housing are incorrect and misleading.”

(Image courtesy of Peabody)

What is this? A £1.5 billion overhaul planned for Thamesmead in east London, which will include some build-to-rent properties.

Who runs it? Peabody, London’s “oldest and largest” charitable housing trust. They say that all of their profits are reinvested into providing new low-cost housing for Londoners and have recently announced plans to merge with fellow housing association Family Mosaic, giving them assets worth £6 billion. They offer mixed-use housing.

What do they say about it? “Thamesmead is still one of the most affordable places to live in London. Prices will rise with better transport links, so people in their 20s might want to look into shared ownership properties in the area to get a bang for their buck. There is space for 20,000 new homes in the area, and Peabody has plans to attract new businesses and investment to the town. These things mean the area will be a good place to live because, a) it will be closer to London because of better travel links (Crossrail and DLR); b) there will be more high value and studying opportunities in Thamesmead itself; and c) it will remain more affordable because it is outer London.

There is a housing crisis in London and across the country. The only way to solve this is to build new homes across all tenures – to rent and to buy.”

How much would a month’s rent be? 84 percent of Peabody’s general rents are below £150 per week. Prices are likely to be in line with this, a spokesman says.

Is there a catch? Well, as they said, “prices will rise” so it may be hard to keep properties cheap in the future. That could make things difficult for poorer residents but for now it all looks alright.

(Image courtesy of Tipi)

What is this? Fancy flats at Wembley Park with a 24-hour concierge, gym and a screening area. Imagine living in a hotel, but with lots of sociable well-off young people who have just left the nest and need “help” and “security reassurance” in their home-away-from-home.

Who runs it? Tipi, an offshoot of property investment and development company Quintain. Tipi both own and manage the 85-acre site.

What do they say about it? “Our team are all between 22 and 29 and so they’re mixing with people similar to their age with any issues that they have,” says Jennie Fojtik, head of lettings. “Whilst the rent may seem higher than average, the ease with which things are included within the rent is a big appeal. You have things like your utilities and your broadband. No agency, no end of tenancy cleaning costs and smaller than average security deposits.”

How much would a month’s rent be? One-bedroom apartments start from £1,500 a month (about £340 per week).

Is there a catch? The minimum amount you are allowed to be earning to live in a Tipi apartment in Wembley Park is £25,000, putting them just out of reach for a large swathe of people in their 20s, who may just be starting out in work on lower salaries. £26,500 is the average annual salary in the country, as a point of reference.

What is this? Vantage Point, in Archway, London. Rent includes wifi, utilities, insurance and Zipcar membership – hey, if we’re the generation that won’t likely commit to owning a house, not owning a car follows on naturally.

Who runs it? Essential Living: A London-based property developer who have build-to-rent schemes in places like Greenwich, Maidenhead and Bethnal Green.

What do they say about it? “It’s purely about offering choice that customers in the US benefit from, so that those who want to rent have the opportunity to do so with many inclusive benefits.”

How much would a month’s rent be? Prices for a one-bedroom apartment in start at £1987 (£450 pw).

Is there a catch? Not at face value. Although they are not a social housing company, Essential Living say there are “committed to including affordable housing in every new build scheme with apartments priced from 55 percent of market rent”. This isn’t a catch, it’s a good thing – but whether or not the housing is actually affordable is another question.

What is this? A block of clean-looking flats in Stepney Green, east London. Convenience is key, where tenants have their own on-site property “Bob” manager – in this case, someone named Kassy – and listings from other properties under the same umbrella highlight proximity to public transport links.

Who runs it? Fizzy Living, a subsidiary of Thames Valley Housing specifically for young people earning a fair bit of money who also love convenience. Convenience homes, convenience food… Convenience pets (there is a “pet station” in the lobby at Stepney Green with cleaning kit and pet treats).

What do they say about it? “Home ownership is a positive aspiration but for many people it just doesn’t present a realistic option, with house prices in some parts of the capital at 24 times the local wage,” says managing director Harry Downes. “What is concerning is that in addition to this, opinion and expectations of rental accommodation are extremely low and this is compounded by awful standards and a critical lack of supply. This attitude about renting long-term is one that Fizzy is desperate to change by improving standards and providing a quality of service that makes renting a positive choice. While home ownership is important, for many renting is a lifestyle choice and for them we offer a positive solution.”

How much would a month’s rent be? Their one-bedroom properties start from £1,460 (around £312 per week).

Is there a catch? Mostly that the prices may be out of reach for people on starting salaries in the £18,000 per year range.

@charliebcuff

More on VICE:

Is Sadiq Khan’s ‘London Living Rent’ Actually Going to Make Your Rent Cheaper?

The Slow Death of Council Housing in the UK

Photos of the Creepy ‘Aspirational’ Hoardings that Surround New Builds