Author: Cyril Richert
Nearly two years ago the world was learning about Covid. At the end of January 2020 we watched with astonishment people locked inside their own homes in some areas of China. Here, by the end of March 2020, the Prime Minister was ordering British people to stay at home. Over the period, “lockdown” had become one of the most searched word on Google. Students and young professionals were amongst the most affected as many have been confined in their small studio flats for months, without much possibility to go outside and mix with others. Office space, gyms, restaurants, cinemas, community spaces were closed and studies show that the more you depended on that, the more you were affected.
What have we learnt from this? That personal space is critical, that access to private outside amenity is essential? The pandemic does not seem to affect the reasoning of developers in this country. The trending idea, which started before the pandemic, seems to be to allocate only a tiny private space to individuals and mixing as much as possible for everything else.
They call it: co-living, which is a nice buzzword for Buy-to-Let products providing compact non self-contained units with shared communal facilities. In a nutshell, co-living projects cut personal space (do we really need personal space might wonder some developers?). Those schemes are designed for large (very large) cities and it is gaining momentum across the UK (after London, Birmingham and Manchester, with a gigantic multi-tower and 2,224 bed co-living development on First Street, are catching up with the trend).
In October 2019, the estate agent Savills wrote: “The quality, increased number of occupants and facilities such as gyms, co-working spaces, cinemas, cafés, kitchens and laundries designed to encourage community spirit and the exchange of ideas means that co-living is considered to fall within a sui generis use class. […] Co-living is becoming established in a handful of pioneering London boroughs, such as Ealing, Harrow, Tower Hamlets and Wandsworth, where the delivery of operational schemes is now ongoing.“
Benefits primarily for developers and local authorities
We are not saying that those schemes are only bad ideas. There is a market for short term rental, either for young professionals who were previously living in student accommodations (such as Gradpad, beside Clapham Junction Station), or employees on the move and looking for a temporary accommodation while they settle into a new job. It targets a population looking for more flexibility, craves community and happy to live in what looks like a long-stay hotel facility.
But there are already plenty on offer for those individuals. A simple search on Google for “flatshare london” or “flatmate” will provide hundreds of thousands of results and many websites specialised on this market: IdealFlatmate, EasyRoommate, Spareroom, Room Buddies, Kangaroom… For those with a bigger budget, you can also choose self-contained studios and apart-hotel specialised for this type of accommodation (note that co-living companies are also providing this option such as the Collective in Canary Wharf).
The real beneficiaries of those schemes are actually local authorities, in term of meeting their housing targets, and private developers because they can break free of standard planning rules in term of minimum sizes, private amenity space and affordable provision (London Plan Policy H18 A5a-g discharge them of complying with the normal planning rules for self-contained units).
Gold-rush for property developers
According to the Technical housing standards – nationally described space standard (NDSS), a 1 bedroom-1 person dwelling with a shower room must not be less than 37m2 (and for comparison, the average hotel room in the UK is 32 sqm). But for a co-living scheme, you will often find that they only provide a tiny room with en-suite shower for half this space (20-25sqm for the proposal in Battersea Park Road for example, and in The Collective in Canary Wharf a “cosy” room is 12sqm and a big one is 30sqm!). As a blog dedicated on development in Canary Wharf says: “To put that into perspective, A UK parking space is around 11.5 square metres.“
The applicants explain that the occupants will ‘share’ internal and external amenity spaces (which is exactly what has been causing so much problems for the last two years). In a way, a sort of trendy hotel with managed services.
One major argument put forward is also that it is affordable. That “affordability” definition is, actually, only defined by … the developers themselves. Everyone knows that in general the smaller the flat, the more expensive per square meter. For example you will find 36 sqm in Lavender Hill SW11 for £1450pcm (£40/sqm) and 75 sqm in Kingsley Street SW11 for £2197 pcm (£29/sqm). The report on shared living need for the proposal beside the Harris Academy on Battersea Park Road (p.a. 2021/5013) says:
“It is assumed that the Proposed Development will provide shared living units at an average gross monthly cost of £1,450 per calendar month (pcm).”
So in term of affordability, we are comparing a 36sqm 1-bedroom flat in a private property, with a 20-25sqm bedroom in a co-living scheme. Of course, shared living developers claim that the comparison must take into account that the co-living units are “all-inclusive”, meaning that water, internet, heating and council tax are included in the rent. But even their re-adjusted equivalent rent of £1150 does not make it cheaper than the private rent property (£46/sqm to compare with £40/sqm).
“Headline rates are stated as per week, for longer stays. At a first glance, for all of the facilities on offer £330pw doesn’t sound exceptional for London rental prices. But that is for a 12msq room.
In comparison their larger room, the “big” studio, works out at £2817 per month. Comparing that with Canary Wharf’s latest offering, 10 George Street by Vertus. You could rent a a fully managed and furnished, one bedroom apartment in another exceptionally high quality, brand new building from £2300, nearly £500 pounds a month less. And the one bedroom in Vertus is double the size, at 60sqm. “
Even for the applicants, the justification to brand an expensive accommodation as affordable (such a perfect oxymoron!) is very difficult to make. For example, in their report, they say:
“the gross household income would need to be £49,380 for an individual to be able to afford a shared living unit. When compared to the median income for all of LBW’s full-time working residents, £46,200, an average of 38% of an individual’s gross earnings would need to be spent on gross rent to lease a shared living unit at the Proposed Development, 8 percentage points below the current LBW average across all types of accommodation for single-bedroom households (46%). This is a substantial improvement in accommodation options for individual’s looking to reside in single-person units within the borough.”
In reality, co-living spaces tend to cost at or near market rates. However, because they share all the facilities and communal rooms, property developers make a lot more money per square meter than on a traditional building.
A recent survey explains that “the product is not solving for true affordable housing, but instead is offering a discounted premium product targeted a specific subset of renters“.
The London plan is not duped by such presentation, and in their policy H18, they specify:
“Policy H18 8 requires an in-lieu affordable housing requirement because LSPBSL [Large Scale Shared Living Development] does not provide self-contained homes suitable for meeting affordable housing needs. This is because LSPBSL does not provide stable, long-term accommodation suitable for most households in need of genuinely affordable housing, including families.”
In theory, it means developments are expected to provide a contribution that is equivalent to 35% of the residential units to be provided at a discount of 50% of the market rent. The usual trick played by the developers is to claim that the scheme becomes unviable, so they either minimize the contribution (this is the case in the co-living scheme proposal for Hazel court, where they offered a lump sum payment £900,000) or dismiss it completely (on Battersea Park Road’s proposal, they claim that replacing the Sport Hall that they destroyed is costly enough).
Housing target, check; local tax, check: A very good deal for the local authorities
On the short term, it is also a very good deal for the local authority. First it is a huge contribution to their housing targets: the draft London Plan sets an annualised average target of 2,310 new homes per year for the next 10 years (note that projections were made before the pandemic, and we now expect a decrease of the London population). The document also say (par. 4.1.9) that co-living accommodation should “count towards meeting housing target on the basis that 1.8” unit should be counted as a single home.
5 6 recent proposals for shared living schemes, Wandsworth Council makes already 774 913 units, which is equivalent to a third nearly half of its annual target (for 1393 1643 units in co-living made with 213 for Battersea Park Road, 159 for Hazel Court, 292 in Earlsfieds, 182 239 in Chatfield/York road area, 193 for Access Self Storage York Road and 547 in Lombard Road), most of them within a 1 mile radius. All applicants for those schemes are highlighting clearly this huge benefit. Let’s quote for instance the report on shared living needs for the proposal beside the Harris Academy on Battersea Park Road (p.a. 2021/5013):
“In 2019-20, LBW delivered a total of 1,315 net additional dwellings. This latest year of delivery is 33% below the annual target (1,950) established under the latest London Plan. […] the Council acknowledges that “meeting the objectively assessed local housing need figure (25,370) poses a significant challenge”, with the borough’s “objectively assessed housing need is far in excess of its identified sources of housing capacity”. “
It also generates a lot more additional income in term of Council tax than standard accommodation. Residents of the proposed developments will all be council tax payers. In comparison, the initial proposal for the Battersea Park Road site for example was for “only” 39 units, including 12 affordable flats.
547 co-living units proposed in a tower of 24 storeys in Lombard Road
We’ve just published about a new proposal with 213 co-living “flats” in Battersea Park road and we now receive in our mail box a new application for… 547 shared living units in Lombard Road (York Road area).
The proposed scheme (p.a. 2021/4936) consists of a tower of up to 24 storeys all dedicated to co-living and associated amenity space, co-working, cycle hub, café and retail floorspace (approximately 2,023 sqm Class E), landscaping and all associated works.
For those we think that 24 is too much, you will be pleased to hear that pre-application meetings suggested 31 storeys, but officers seemed concern that it was too close to the 32 storeys they promote for Winstanley Estates, however leaving the door open for a taller than already approved tower.
There is no parking available (excavation is too expensive for developers, but it’s hidden with green washing) except one disabled parking spaces and two car club spaces. You will also often see the term of co-living associated with “Sui Generis”, which means “of its own kind”, a planning term for saying that it can derogate to standard rights as it is “unique”.
This proposal is very similar to the proposal for Battersea Park Road as there is already an approved 5 blocks up to 20 storeys to replace the Yellow Box warehouse in Lombard Road, therefore the principle of a tower has been agreed.
Unlike Battersea Park Road where nothing has been done yet, all the non residential elements (the new Big Yellow self-storage facility including artist studios and flexible office space) have already been completed as phase 1 (2018/3776).
But alike the Battersea Park Road co-living proposal, this new application seek to replace all 168 residential units (which included 60 affordable homes!) with 547 co-living bedrooms ranging in size from 22 to 36.5 sqm. And as explained above, the drop of residential in favour of small bedrooms in a shared scheme means that they can claim “the equivalent of 303 traditional homes” (p35 of the planning statement). Very appealing for the Council! The developers have indicated that they are willing to contribute to the affordable provision, but have left it open to future negotiations with the planners.
Depending on the contribution for affordable housing, it is very likely that whatever will be decided for one scheme will stand for the second one. All members of the Planning Application Committee should be aware of that.
Other co-living schemes in the borough
- Battersea Park Road/Culvert Road: proposal for 18 storey tower with 213 shared-living units (p.a. 2021/5013).
- Hazel Court (St John’s Hill): granted after appeal for erection of a part 2 and 6 storey building comprising 159 co-living rooms (p.a. 2020/2560).
- The Collective/Trewint Street SW18: approved for erection of two blocks between 8 and 6 storeys providing 292 co-living units (p.a. 2019/1083).
- Chatfield Road SW11: approved for two blocks up to 8-storeys comprising
182 shared-living rooms and 81 room hotel (p.a. 2019/5484)239 shared-living rooms
and 31 hotel rooms (p.a. 2020/4512).
- Access Self Storage 248-250 York Road SW11 (p.a. 2020/4285): approved blocks ranging from 8 to 13 storeys comprising 193 shared-living rooms and 131 residential units.
Manchester’s independent media The Meteor, wondered last year: “Is it a new form of renting that builds community, as developers trumpet, or a just new product fitting into an increasingly broken housing market?“. I think we know the answer.
UPDATE 29/11/2021: Thanks to the comment from Battersea Reach Residents Association, I have corrected the numbers for Chatfield Road and added Access Storage/York Rd (which is just on the other side of the road, on a different plot). I have changed the calculation for the total granted/proposed to 1643 (1393 previously).