How Build to Rent flats could transform Sheffield
Broadening the mix of housing in Sheffield city centre beyond student development was the focus of a Star round table discussion attended by key players in the property profession.
Under scrutiny was whether Build to Rent was the way forward and how it could potentially impact on the regeneration of the city centre.
Build to Rent refers to the emerging market in private accommodation, designed for long-term rent rather than for sale, typically owned by institutional investors, managed by specialist operators and offering on site facilities such as a gym.
Leigh Bramall, director of Sheffield communications firm Counter Context, which hosted the discussion at its Vicar Lane premises, said he felt the historic development of student housing around the city had had a massive benefit, bringing footfall and a vibrancy back to the city centre.
He added: “However, there are periods when students are absent and the city is much quieter, giving it a more transient flavour. We need a permanent residential community as well.”
Mr Bramall was concerned that if there was only one type of tenure then the retail and leisure outlets were skewed to reflect that market.
He added: “If we are looking to attract people from whole of the city into the centre to enjoy it then it needs to have a broader mix of retail and leisure.”
David Hussey-Yeo secretary of SCRAGG, Sheffield City Residents Action Group, said the group’s target was to bring in another 10,000 permanent residents into the city centre within the next five to 10 years. He added: “Retail is dying, we need to regenerate the city centre.”
Diane Jarvis, manager of Sheffield’s Business Improvement District, agreed that students were hugely beneficial to the the economy but it was important to retain them when they finished their course and for some to become young professionals who lived in the city centre.
But, she added, for that to happen there has to be suitable accommodation, which is where build to rent was particularly relevant.
Ian Lowson, director of Whittam Cox Architects, has a particular interest in BTR and confirmed there was demand, with a number of schemes under consideration ranging from one to three-bed homes.
However, he sounded a word of warning: “It is supposed that the three-bedroom apartments are for families but I don’t think anyone will use them for families. They are not an attractive enough proposition. Families need gardens and public spaces. Bringing up a family in the city centre would be a panacea but we’re not there yet.”
Ian explained the difference between BTR and the more usual rented properties is that, instead of selling the property, the developer retains ownership.
He added:”One of the key briefs is that it has to be built to last - it is not in the developers’ interest for their building to fall to bits in five years.”
Leigh agreed that it was a good thing for the city and added that a lot of international money is invested from pension funds, for example, and developers wanted to put their money where it will generate regular income.
Clare Plant, director of DLP Planning, said that there was another group of workers - the highly skilled - coming to Sheffield for short periods of time who want flexible accommodation in the city so they can access the many facilities.
Leigh Bramall - director of Sheffield communications company Counter Context
Diane Jarvis - manager of Sheffield’s Business Improvement District
David Hussey-Yeo - Secretary of SCRAGG, Sheffield City Centre Residents’ Action Group
Clare Plant - director of DLP Planning
Mark Ross - director of Redbrik Estate Agents
Ian Lowson - director at Whittam Cox architects
David Walsh - The Star business editor
SHEFFIELD BARRIERS TO BUILD TO RENT
Build to rent flats have sprung up across the country but there are none in Sheffield - yet.
Platform has submitted an application for a big complex on Sylvester Street near Decathlon and there are other projects in the pipeline, the round table heard.
But there were several barriers which could prevent a scheme from being viable.
Clare Plant said her company was looking at lots of schemes and having pre-application discussions on others but that there were problems at the planning stage.
She said: “It is a combination of the fact that rental values in Sheffield are not as great as Leeds and Manchester and we must accept that as a city.”
She reiterated that these developments were seen primarily as long term investments and added: “What happens is that if you have a lot of up-front costs levelled against the development such as the quality that these providers are looking to deliver.
“You therefore have a real issue with funding at the outset. There is lots of desire to build these types of schemes but they need a helping hand.”
She expressed concern that the quality may be less than expected and that the costs of redeveloping brownfield sites, for example, where there are issues of contamination and clearing the site of what has been left behind by previous users, is challenging.
She added: “There’s lots of desire and if we really want the level of housing that is being promoted in the city centre masterplan then we need to look at how we can make sites deliverable.”
The height of buildings was also discussed at length with some disagreement as to whether tall was viable.
Mark Ross said: “Building tall is an aspiration that is physically not possible in the market at the moment with build costs the way they are. I just don’t think that any developer is going to build tall towers.”
Architect Ian Lawson agreed to a certain extent saying: “Over a certain height it is going to become less economic but the developers are squeezed in a lot of different directions.”
He added: “While there are build costs in going high there are viability challenges in going low. I have been speaking to a few BTR developers and they say they need at least 150 units to stack up. If you are going to have to fund a 24-hour concierge then there are costs that come with that. There aren’t a huge numbers of massive sites available. If you’ve got a plot of land then it’s whatever that plot will allow for you to get to your 150 units on and actually some of them are looking at 300-350. It’s a complex balance.”
There were fears expressed that Sheffield may miss out on BTR and the benefits it might bring and that Sheffield Council’s local plan is out of date.
Clare said: “The council has been producing a new plan for a long time. We need the right plan to bring some certainty because developers are taking a big risk in purchasing these sites and we need to support them to deliver the sort of development we all want to see.”
THE STIGMA OF RENTING HAS GONE
As house prices rise, there has been a complete reversal of the late 20th Century drive to own property.
And the 21st Century embrace of renting has led to a boom in build to rent across the country.
David Hussey-Yeo, secretary of SCRAGG - Sheffield City Centre Residents’ Action Group - said: “Lots of millennials don’t want to buy, they want to rent as they want to be flexible. Jobs aren’t jobs for life any more and they want to move.”
Mark Ross, director of Redbrik Estate Agents, considered the sort of accommodation that students are currently living in and added: “They have gyms in these buildings, they have amenity space and expectations are high.”
He explained that as the interest rates for mortgages were low, availability of housing is high and house prices were rising five per cent-a-year in Sheffield, which means higher deposits.
He added: “The traditional market in which most of us bought our first houses probably doesn’t exist any more for the vast number of people leaving university today or in five years time. Unless you have got the ‘bank of mum and dad’ it is going to be very difficult to get into the traditional market and buy.”
Leigh Bramall, director of Counter Context, said his company employed a lot of talented young people, many of whom come out of local universities.
He added: “I can’t think of any of them who don’t live in or on the edge of the city centre and they all rent.
“Being close to the railway station and being able to walk to work is a massive advantage rather than going on long commutes.”