Future of Cities - Future of UK Housing Supply 2022

A VARIETY OF CHOICE

The city of 2040 will offer households a greater choice, with a diverse range of living products to suit everyone’s needs.

STUDENT ACCOMMODATION There are now a record 2.18 million full-time students studying at UK universities, which has set a new record for higher education demand. In England, an additional 430,000 higher education places are projected to be needed by 2040 (HESA & HEPI). We expect to see strong growth in the purpose built student accommodation sector, allowing students a greater choice in university living options. CO-LIVING Co-living offers community-centric living for single households. These homes often appeal to people who are new to the city and looking to build up a network. Co-living helps address loneliness and encourages social interactions and new relationships through communal spaces and events. The all-inclusive nature and flexible lease lengths attract footloose residents and the growing number of digital nomads. The mid-market will provide affordable homes within a short commute of cities and towns. There is a shortage of affordable rental homes across the UK and the imbalance between supply and demand has and continues to push up rents. Strong rental growth has resulted in a lack of ‘affordable’ homes for those on middle to low incomes. The premium Build-to-Rent market will appeal to city professionals or families who want to embrace an urban lifestyle. They will have a vast array of amenities and primarily be in prime locations. SINGLE FAMILY HOUSING With nearly two-thirds of UK renters living in rural or suburban locations there is a huge need for a greater choice in rental accommodation outside city centres. Single Family Housing (SFH) offers renters a well-managed and high-quality home. SFH is likely to appeal to older renters and families who tend to want a longer lease length, often tied to schools and local communities. Investors also benefit from long leases, with lower turnover, fewer voids, and less gross-to-net leakage. INTEGRATED RETIREMENT COMMUNITIES The population aged 65+ is set to increase from 11.2 million today to 17.2 million by 2040 (The Mayhew Review, ilc). The ageing population need suitable homes to help them stay healthy for longer and have access to the appropriate level of care. Integrated Retirement Communities (IRC) will support retirees’ lifestyles, providing restaurants, cafes, hairdressers, gardens, events, and 24-hour on-site care. Retirement homes will be close to town centres, helping create integrated, safe and social communities. The Mayhew review recommends 50,000 new retirement units should be built a year. Building more IRC will help free up housing lower down the ladder, for each bedroom added to the retirement stock, two to three are released in mainstream housing market. BUILD-TO-RENT We have started to see diversification of Build-to-Rent products.

19 The Future of UK Housing Supply |