Britain’s first US style rental developer comments on today’s housing figures

Figures released today from the DCLG offer unequivocal proof of the growing demand in England for private rental housing. The latest English Housing Survey showed that the number of households renting privately in the UK rose to four million in 2012-13, overtaking socially rented housing to become the second largest tenure in England.

Essential Living are the first UK developer to build and manage private rental homes from the ground up, and currently have over 1,500 homes under development across Greater London. Backed by $200m of equity from M3 Capital Partners, who manage U.S. institutional funds, Essential Living plans to design, build and manage a total of 5,000 rented homes across London and the South East.

Current schemes include:

  • 360 London, Newington Butts: A landmark 470 home development in Elephant and Castle, 360 London will be the largest rental development since Dolphin Sq. in the 1930s. The scheme, developed in partnership with Mace, marks the first time the GLA has supplied public land to build homes specifically for rent.
  • Berkshire House, Maidenhead: Receiving planning permission at the end of 2013, the redevelopment of the 14-storey Berkshire house was the first office-to-resi private rental development in the UK to win planning permission.
  • Archway Tower, Archway: A landmark redevelopment of the existing office tower that will provide c.100 new rental homes.
  • Helix, Canary Wharf: A 345 home development comprising two elliptical towers of 29 and 35-storeys.

Increasing the viability of PRS developments in the UK was the subject of a new report issued earlier this week by Addleshaw Goddard and the British Property Federation, which can be viewed here.

Darryl Flay, chief executive of Essential Living, said:

“Many vilify Britain’s PRS due to lack of service and standards, and this is where institutions come in. The key difference is that businesses like ours, backed by M3 Capital Partners, are focused on both building and managing homes for the long term. It’s in our interest to keep tenants happy, which means providing amenity spaces and great services, and above all, saving people time.

“Focusing on long-term income rather than the short-term returns gained from selling homes for sale is a different business model from the one I spent 25 years perfecting at major housebuilders.

“But many, including Boris Johnson, believe the PRS could deliver a step-change in Britain’s approach to housing.

“After agreeing a “milestone” deal with us last August to develop a 44-storey tower for rent in Elephant & Castle, Boris said: “This ‘holy grail’ of investment in the riskier pre-development stage is a hugely important milestone but it is just the beginning. I want to entice other institutional investors to come forward.”