With London’s official population predicted to grow by almost 2 million to around 10.8 million by 2041 and employment is expected to increase on average by 49,000 jobs each year, there is increased pressure on transportation facilities links and the use of space. This report will discuss the major changes that will be observed in the capital, along with the housing and office space targets set out by the government for the next 10 years.
Bakerloo line extension (BLE)
The Bakerloo Line is expected to significantly improve connectivity and reduce journey times in the capital, supporting new homes and employment thanks to the proposed extension from Elephant & Castle to Lewisham and beyond.
With the extension aiming to serve both Old Kent Road and New Cross Gate, there will be new opportunities for redevelopment around the stations, to complement the existing education, leisure, employment and retail offer in the New Cross area. The extension proposal will enable the delivery of additional housing, alongside public realm and highway improvements. Furthermore, Lewisham expects to significantly benefit from the scheme, supported by the arrival of the Bakerloo Line at Lewisham Interchange and any potential future extensions of the scheme beyond Lewisham.
Planning frameworks should identify the development opportunities which are made possible as a result of the Bakerloo Line Extension, as well as how this would be phased to reflect the connectivity and capacity benefits it unlocks.
Crossrail 2 is a proposed new railway serving London and the wider South East. With an expected operational date of 2033, this transportation infrastructure will connect the South West Mainline to New Southgate, via new tunnels from Wimbledon and through central London, as well as to Tottenham Hale, where the South West Mainline will connect with the West Anglia Mainline. The initiative is expected to significantly reduce journey times, improving connectivity to and from key growth areas across London and beyond.
This regeneration impact will help support the delivery of up to 200,000 new homes, as well as numerous mixed-use and commercial developments, with planning frameworks being expected to respond to the created development opportunities. New capacity is expected to open up across the corridor and the opportunity areas located within the corridor.
Kingston has been identified as one such opportunity area, with significant potential for accommodating new developments to increase the number of regional offerings including leisure, cultural and night-time activity, commercial and retail, as well as high-density housing.
The delivery of the Crossrail 2 tunnel will require significant redevelopment in the Wimbledon area, suggesting that the area is set to offer numerous residential and commercial development opportunities.
With the Mayor of London, Sadiq Khan, aiming to promote employment growth in outer London centres, there is increased potential for speculative office development in this area. Additional network connections put forward by the Crossrail 2 initiative have spurred the authorities to consider a reconfiguration of Clapham Junction station layout, given the already substantial over-crowding observed at the station during rush hours.
Opening in December 2019, the Elizabeth Line will transform connectivity for over 60 miles from Reading and Heathrow in the west, through to Shenfield and Abbey Wood in the east. It has already resulted in increased development in central London and further growth and development are expected to be seen from Stratford eastwards. Covering 41 accessible stations, 10 of which will be newly built, the new railway is expected to serve around 200 million people each year, allowing commuters to get from Whitechapel to Bond Street in ten minutes and from Farringdon to Paddington in eight.
According to research from Landbay, the initiative has resulted in average rental growth around the future Elizabeth line stations to double the average elsewhere in the capital since 2012, with rents along the line growing by 16.38% in comparison to the London average of 8.2%.
The Tram has transformed travel opportunities in the key South London town centres of Croydon, Sutton and Wimbledon, providing the potential for further growth in housing and jobs. The proposal to extend the Tram to Sutton Town Centre and potentially further to the proposed Cancer Hub would improve public transport accessibility to the town centre and St. Helier Hospital, supporting the delivery of at least 10,000 homes. Transport for London and the GLA are working with the boroughs to produce a robust business case and funding package, demonstrating how housing and employment growth can be unlocked.
To achieve the 10-year target for net housing completions, which currently stands at 649,350 houses to be built by 2029 across all boroughs, the Mayor of London highlights the importance of creating places of higher density in appropriate locations to get more out of limited land. This strategy encourages a mix of land uses and co-locating different uses to provide communities with a wider range of services and amenities. Such high-density, mixed-use places support agglomeration and, in turn, maximise business creation and job opportunities.
The Mayor’s 2017 London Plan points to the capital’s significant unmet need for affordable housing. Boroughs are encouraged to include policies requiring affordable housing from sites of ten or fewer units in their Development Plans, given that such sites are the main source of supply in some boroughs and play an important role in contributing to affordable housing delivery, often via cash in lieu contributions.
With the office market going through a period of restructuring, there are increases in the numbers of micro, small and medium-sized enterprises (SMEs), as well as changes in work styles due to technological, flexible and co-working space advances.
Projections of 619,300 new office employment opportunities by 2041, could translate into new demand for up to 6.1 million sqm of office floor-space. Consequently, the Mayor of London has emphasised that Development Plans and development proposals should support the provision of space suitable for SMEs, given the demand from new start-up companies.
Overall, with London expecting an influx of new infrastructure and employment opportunities soon, both developers and investors should keep an eye on areas that are subject to regeneration, as well as on the newly generated and favoured demand for mixed-use property and office space.
This article was written by Matthew Dailly, Managing Director of specialist bridging loan and development finance broker – Tiger Financial.
About Tiger Financial:
Tiger Financial is whole of market bridging loans and development finance broker with over a decade in the market. Their team works to provide short term property funding solutions across the whole of the UK, offering bespoke and flexible lending terms. Using their well-established network of trusted lenders, Tiger guarantees to beat any rate. Get in touch now to find out how the right funding can you can make your property business fly.