London Residential Breakfast Briefing 2015 | Estates Gazette

NIGEL EVANS
HEAD OF LONDON RESIDENTIAL RESEARCH
Copyright: LRR/EGi
THIS PRESENTATION IS BASED ON DATA DERIVED FROM 3 OF LRR’S 2015
REPORTS.
DOWNLOAD ALL 3 REPORTS HERE:
http://www.estatesgazette.com/egi-about/london-residential-market-analysis-2015/

Headlines from our latest reports:
• Construction Starts skyrocket
• More Towers in London than NY
• Where did all the social housing go?
• Were the commuted payments enough?
Where our data comes from
Copyright: LRR/EGi

Where does it come from?
The engine
Copyright: LRR/EGi

Methodology
Copyright: LRR/EGi

Trigger source:
Planning applications
Copyright: LRR/EGi

Was planning permission
granted/refused/deferred?
• Deferred - we’ll get it next time
• Refused - we’ll check for appeals
• Granted - we’ll site visit it
*not just for Islington…
Copyright: LRR/EGi

City
Camden
Westminster
K&C
Islingt’n Hackney
Lambeth
City
Camden
Westminster
K&C
Islingt’n Hackney
Lambeth
All of London
All 33 Boroughs
No exceptions
No arbitrary boundaries
No selected boroughs
All of it
We look at…

200,000 applications
1,000 committees
Per annum

Then we visit every
single site with
permission…

…as well as all those
under construction

Site Visits
6 month cycle
33 boroughs
4 questions…

Has it Started?
Has it Finished?
Is it being Marketed?
Has it Stalled?
Or perhaps more common these days

Have you sold it all off plan?

3,840 site visits per 6 month cycle

130 site visits per
week
x
7,680 site visits
per annum

All this to maintain a database of nearly
25,000 individual developments
updated daily since 1996

24,806Construction starts…the highest number of starts for over
PART 1

Copyright: LRR/EGi

DECADES
Copyright: LRR/Copyright:

0
500
1000
1500
2000
2500
3000
TowerHamlets
Southwark
Wandsworth
Hammersmith&Fulham
Westminster
Hackney
Lambeth
Camden
Islington
Kensington&Chelsea
City
Newham
Lewisham
Greenwich
Croydon
Brent
Barnet
Hillingdon
WalthamForest
Ealing
Hounslow
Harrow
Enfield
Havering
Sutton
Haringey
Barking&Dagenham
Bromley
Merton
Bexley
Redbridge
Richmond
Kingston
STARTS by Borough 2014
Copyright: LRR/EGi

STARTS
TOP 5 INNER BOROUGHS
PRIVATE UNITS 2014 TOWER HAMLETS – 2,307
UNITS STARTED
SOUTHWARK – 2,188
UNITS STARTED
WANDSWORTH – 1,703
UNITS STARTED
HAMMERSMITH & FULHAM – 964
UNITS STARTED
WESTMINSTER – 942
UNITS STARTED
Copyright: LRR/EGi

STARTS
NEWHAM – 2,591
UNITS STARTED
LEWISHAM – 1,247
UNITS STARTED
GREENWICH– 1,187
UNITS STARTED
CROYDON – 1,179
UNITS STARTED
BRENT – 1,074
UNITS STARTED
TOP 5 OUTER BOROUGHS
PRIVATE UNITS 2014
Copyright: LRR/EGi

STARTS
DEVELOPMENT
FOCUSD TO THE
EAST
ODD THING

Starts/under construction
up
completions
down
…another look at our main table again
UP
DOWN*
*on what we expected
Copyright: LRR/EGi:

connection with UNITS under construction one year
Copyright: LRR/EGi:

and completions the next
Copyright: LRR/EGi:

on average 70% of units U/C one year complete the following one…until you get to

No longer 70% but
Copyright: LRR/EGi:

Only 58% of UNITS under construction in 2013 completed in 2014.
Copyright: LRR/EGi:

despite 7,000 MORE UNITS U/C in 2013 compared to 2012
Copyright: LRR/EGi:

despite 7,000 MORE UNITS U/C in 2013 compared to 2012
18,634 units
25,749units

this only translated into 598 extra unit completions…
Copyright: LRR/EGi:

Had we’d seen the normal 70% relationship
then we would have got a graph like this:
70%
Copyright: LRR/EGi:

But instead we got…
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Under construction Completions
Copyright: LRR/EGi:

0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Copyright: LRR/EGi:

Not this …over 18,000 units completing
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Copyright: LRR/EGi:

But this… just under 15,000 units
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Copyright: LRR/EGi:

Not this
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

But this
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Copyright: LRR/EGi:

PART 2

What’s going on is …
TOWERS

0
5
10
15
20
25
30
35
2006 2007 2008 2009 2010 2011 2012 2013 2014
Tower Starts
20+ 30+ 40+ 50+
5 8
15
30
Copyright: LRR/EGi:

VNEBOA – Vauxhall
6
The Elephant
3
Stratford
5
Copyright: LRR/EGi

NINE ELMS POINT
28 & 37
VAUXHALL SKY
GARDENS
36
MERANO
28
THE CORNICHE
27 & 24
360 London
44
South Village
23
Eileen House
44
CATALYST Copyright: LRR/EGi

NINE ELMS
VAUXHALL
WATERLOO
and may be a catalyst
Copyright: LRR/EGi

171 BATTERSEA PK. RD:
325 UNITS
BATTERSEA GARDENS:
850 UNITS
THAMES WATER SITE:
515 UNITS
46 PONTON ROAD:
362 UNITS
TINTAGEL HOUSE:
454 UNITS
TEXACO STATION:
164UNITS
FLORIAN PLACE :
275 UNITS
54 KENNINGTON RD:
145 UNITS
374 WANDSWORTH RD:
124 UNITS
BLORE CLOSE:
20 UNITS
2 CORNELL SQUARE:
9 UNITS
GAS WORKS SITE:
500 UNITS
1 WORGAN STREET:
13 UNITS
73 BLACK PRINCE RD:
8 UNITS
123 W’MNST BRIDGE RD:
5 UNITS
98 LOWER MARSH:
34 UNITS
TEACHER CENTRE:
17 UNITS
131 WATERLOO ROAD:
6 UNITS
26 LOWER MARSH:
6 UNITS
3 CARLISLE LANE:
6 UNITS
THACKERY HOUSE:
6 UNITS
POWER HOUSE:
5 UNITS
BONNINGTON SQUARE:
6UNITS
22 WYVIL ROAD:
9 UNITS
1-30 DAVIDSON GDNS:
12 UNITS
3-13 WILCOX ROAD:
9 UNITS
438 WANDSWORTH RD:
7 UNITS
3,100 units
Some withdrawn, refused, lapsed or master plans being formulated
Copyright: LRR/EGi

London was going to build
more towers than
New York…?

New York YIMBY.
Last year they published a set of figures regarding the number of applications submitted during the
course 2014 for residential towers, by their definition above 30 storeys.
LRR’s US counterparts

51applications for towers* in NY in 2014
*YIMBY definition of towers over 30 storeys
LRR definition over 20 storeys

In the same period London received 52
applications for towers over 30 storeys

0
10
20
30
40
50
60
30+ storeys 50+ store
New York London
more planning applications for towers than New York

only a fraction of what’s in the pipeline

As well as those applications we can add…
permissions
Copyright: LRR/EGi

and on top of those 17 possible sites
sites
Copyright: LRR/EGi

possible future starts in the pipeline right now…and this is where they are
Copyright: LRR/EGi

VNEBOA Elephant
Waterloo/Blackfriars
Stratford
But to really look to the future we must
we have to go back… back to where
these towers started in the first place…
DOCKLANDS
Copyright: LRR/EGi

3 Millharbour: 32
54 Marsh Wall: 39 & 29
50 Marsh Wall: 63
30 Marsh Wall: 52
Quay House: 68
City Pride: 75
Arrowhead Quay: 55 & 50
Wood Wharf: 57
Wood Wharf: 42
Wood Wharf: 36
Wood Wharf: 53
Wood Wharf: 50
Wood Wharf: 30
Wood Wharf: 45
Wood Wharf: 25
3 Millharbour: 35
3 Millharbour: 39
3 Millharbour: 39
3 Millharbour: 45
3 Millharbour: 45
2 Millharbour: 28
2 Millharbour: 25
2 Millharbour: 50
2 Millharbour: 36
Meridien Gate: 53
Newfoundland: 58
Helix: 29 & 35
7 Limeharbour: 23
Asda Site: 21
Copyright: LRR/EGi

£900.00
£1,100.00
£1,300.00
£1,500.00
£1,700.00
£1,900.00
£2,100.00
0 5 10 15 20 25
Goodmans Fields
£500.00
£600.00
£700.00
£800.00
£900.00
£1,000.00
£1,100.00
0 10 20 30 40 50
New Providence Tower
£500.00
£600.00
£700.00
£800.00
£900.00
£1,000.00
£1,100.00
0 5 10 15 20 25 30 35
One The Elephant
£900.00
£1,000.00
£1,100.00
£1,200.00
£1,300.00
£1,400.00
£1,500.00
£1,600.00
4 9 14 19 24
The Eagle
Storeys Storeys
Storeys Storeys
£psqft
£psqft
£psqft
£psqft
UNITS UNITS
UNITSUNITS
Copyright: LRR/EGi

A note of
caution
Copyright: LRR/EGi

In 2014 we saw
phenomenal increases
in the number of construction
starts
Copyright: LRR/EGi

Was there a corresponding boostin the number of units sold?

The number of salesin
2013totalled
12,700 units
Copyright: LRR/EGi

The number of salesin
2014totalled
12,900 units
Copyright: LRR/EGi

a mere
1.6%
increase.
Copyright: LRR/EGi

Some 800 more units remained un-sold and 7,000 more units remained un-launched at the
end of 2014 compared to the end of 2013.
800
7,000Copyright: LRR/EGi

Rapid and unprecedented rises
in the number of units being built…
Rapid unprecedented rises

without a corresponding spikein sales …

could be the precursor to oversupply and an
eventual drop in prices.

Not that we’re calling the top of the market…

Not that we’re calling the top of the market… not just yet.

PART 3

9,798
Social Starts in 2014
Copyright: LRR/EGi

Social Housing STARTS by borough 2014
Alphabetically
Copyright: LRR/EGi

Top 5 inner
Social Housing STARTS 2014: Inner - Outer by delivery
Copyright: LRR/EGi

LAMBETH – 544
UNITS STARTED
SOUTHWARK – 743
UNITS STARTED
TOWER HAMLETS– 1,086
UNITS STARTED
CAMDEN – 359
UNITS STARTED
WANDSWORTH – 313
UNITS STARTED
Top 5 outer
TOP 5 BOROUGHS SOCIAL STARTS - INNER

EALING – 510
UNITS STARTED
BRENT – 577
UNITS STARTED
GREENWICH – 809
UNITS STARTED
HARINGEY – 495
UNITS STARTED
NEWHAM – 425
UNITS STARTED
Compare private and
TOP 5 BOROUGHS SOCIAL STARTS - OUTER
Copyright: LRR/EGi

Social Housing STARTS borough 2014 Inner/Outer
But let’s compare Private with social
WERE GOING TO NEED A BIGGER GRAPH
Copyright: LRR/EGi

Construction starts…the highest number of starts for over
1,400
1,600
1,800
2,000
Social Housing AND PRIVATE STARTS borough 2014 Inner/Outer
Copyright: LRR/EGi

9,798
Not such a magic number
Copyright: LRR/EGi

Private
starts
have
shot up
but social
starts
have
remained
roughly
static
Stick this
on a
graph…
Copyright: LRR/EGi

0
5,000
10,000
15,000
20,000
25,000
30,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
a distinct symmetry.
PRIVATE STARTS
SOCIAL STARTS
PRIVATE V SOCIAL STARTS 2004-2014
Copyright: LRR/EGi

0
5,000
10,000
15,000
20,000
25,000
30,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Broadly speaking the relationship between private and social starts
SOCIAL=74% OF PRIVATE (actual figures in report download it)
74%
more or less…

0
5,000
10,000
15,000
20,000
25,000
30,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
see how closely the actual figures match…up to 2011 and then
line in blue shows that perfect 74% relationship
Copyright: LRR/EGi

0
5,000
10,000
15,000
20,000
25,000
30,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Now had that perfect relationship continued into 2012, 2013, 2014 we would have expected to see this
Remember the magic number?
Copyright: LRR/EGi

0
5,000
10,000
15,000
20,000
25,000
30,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Just as social mirrored private starts in the past so it would in the future

0
5,000
10,000
15,000
20,000
25,000
30,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
But we didn’t get that…
Copyright: LRR/EGi

0
5,000
10,000
15,000
20,000
25,000
30,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Copyright: LRR/EGi

0
5,000
10,000
15,000
20,000
25,000
30,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
on the graph represents a loss of nearly 18,000 units since 2011
18,000shortfall in social units
Copyright: LRR/EGi

However, the provisionof social housing
can
take two forms.

the bricks on the ground
failed? seriously stalled?
commuted payments
in lieu of on/off-site provision?

These are schemes that got permissions which included a payment in-lieu of social housing provision
-
50,000,000
100,000,000
150,000,000
200,000,000
250,000,000
300,000,000
0
10
20
30
40
50
60
70
80
90
100
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
S106 payments v PPG with S106 conditions 2004-2010
Developments of 10 units or more
Number of schemes S106 payments (£)
S106 PAYMENTS
SCHEMES with S106
Copyright: LRR/EGi

Only 70 developments contained an S106 payment in lieu for this entire period
-
50,000,000
100,000,000
150,000,000
200,000,000
250,000,000
300,000,000
0
10
20
30
40
50
60
70
80
90
100
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
S106 PAYMENTS
SCHEMES with S106
Then after 2010…a seismic shift in the number of S106 payments coupled with an increase in schemes.
Copyright: LRR/EGi

-
50,000,000
100,000,000
150,000,000
200,000,000
250,000,000
300,000,000
0
10
20
30
40
50
60
70
80
90
100
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
S106 PAYMENTS
SCHEMES with S106
70 payments in lieu
239 payments in lieu
How does that translate to cash?
Copyright: LRR/EGi

0
5,000
10,000
15,000
20,000
25,000
30,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
£184m
£86m
£192m
2011:
2012:
2013:
£467m
Copyright: LRR/EGi

A huge increase in payments nearly £467m since 2011. So although the level of physical
provision has gone down the level of cash in lieu payments has gone up….
£467msince 2011
PHYSICAL PROVISION
££PAYMENT IN LIEU££
Copyright: LRR/EGi

So the question we have to ask now is…

Can we build 18,000 social units with £467 m?
0
5,000
10,000
15,000
20,000
25,000
30,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
18,000shortfall in social units
£467m
Copyright: LRR/EGi

Lets go back to the graph…
NO

=
6,500*
£467m
£467 m equates to 6,500 social units
*Methodology in the report download there or from GS in QA

still not enough, still a shortfall of nearly 11,500 units
0
5,000
10,000
15,000
20,000
25,000
30,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Actual AH
Actual AH + AH built by £467m in S106 payments*
*Hypothetical
6,500 units over 3 years… we needed 18,000 to get to the “norm”
Copyright: LRR/EGi

So if nearly £467m didn’t make up the shortfall – what amount would have?
By our calculations…..
£467m

0
5,000
10,000
15,000
20,000
25,000
30,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
BILLIONCopyright: LRR/EGi

Would be…
LONDON
Sites, withdrawn, refused, lapsed all were thought to have potential
once…and they could have again
Used to take a lot of work to extract the data
and map it
But a new service by Egi makes finding these sites simple
It’s called Site Finder and it does just that
Follow this link: http://estatesgazette.com/site-finder
Or call Ken Norton on 0207 911 1785

NIGEL EVANS
HEAD OF LONDON RESIDENTIAL RESEARCH
THIS PRESENTATION IS BASED ON DATA DERIVED FROM 3 OF LRR’S 2015
REPORTS.

London Residential Breakfast Briefing 2015 | Estates Gazette

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