Building Upward: How the British Feel About High Rise Living
Investment Homes, Land Management, Estate Brokers
The squeeze is on as the British population continues to increase. London is in a tall building boom, but not all UK residents are willing to let go of their gardens.
The UK has a bit of an identity crisis with regard to housing development. Either we should build up into the sky or out to the green fields - or both (because we cannot afford to do neither).
There are those who take the position of protecting the greenbelts. These include supporters of the Campaign to Protect Rural England, an organisation that opposes Britain’s housing planners’ proposals to develop on a large scale - up to 15,000 homes in various parts of England. Such developments are a modest effort to address the country’s growing population and urgent housing shortage. They propose instead small developments of 6 to 12 homes scattered about the villages (note: that would require 1,250 to 2,500 villages, not all conveniently located). The thinking goes the incremental, distributed approach would impose fewer burdens on infrastructure.
Elsewhere, there are urbanites who have trouble with high rises. Which to the contrary seems only logical: if the country cannot build out, it must go up. This stripe of urbanistvalues human-scaled streets, squares and parks, and mid-height buildings. But has that battle been lost? More than 236 new high rise buildings between 20 and 75 storeys have been or are being built in London. And these are short of The Shard, which at 87 storeys became Western Europe’s tallest building in 2012.
Can we come to some kind of compromise? To anyone engaged in property funds- endeavouring to achieve planning permission to build on raw land - an all-of-the-above strategy is all that is practical. The country is short of one million homes, and the 7 per cent population growth identified in Census 2011 is likely to continue on its trajectory. The population of London itself stands today at 8.6 million people, expected to grow to 10 million in 15 years and to 11 million by 2050. People have to live somewhere.
Of course, it’s well understood that foreign nationals are buying flats in these high rises as investments, rarely if ever actually living in them. But foreign inhabitants in London are hardly new: one-third of Londoners were born somewhere else. Foreign nationals from the U.S. and Asia who are living in London are quite accustomed to high-rise views and long elevator trips to the car park - and much less inclined to tending the primroses.
The traditional English ideal is to live in a detached home with a garden, and that largely remains the case. Many property investors put their cash into real assets to develop homes closer to the ground where cities in the southeast, the west, north and midlands are growing as well. Employers find that locating outside of London enables lower costs for them and their employees. This is why proposed garden cities and other such developments, on green fields as well as brown fields, make a lot of sense.
Investors will go where the money is to be made. To build traditional detached homes, they achieve planning permission to build on unused land; this typically provides a handsome return on the investment. Alternatively, investors in high rises find the higher they build or own in one of the new high rises, the more its value increases - by about 1.5 per cent per floor. At the highest levels in the best buildings, prices begin at £1.35 million (for a one-bedroom flat) and can be worth as much as £15 million. Clearly, these are not the poorly maintained council flats of the 1960s and 1970s.
There are as many ways to invest in UK land as there are types of homes, on the ground and in the air. But would-be investors should always speak with an independent financial advisor to learn which investments and risk factors fit their individual needs and strategies.
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