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Can micro living trends solve London's housing crisis?

With growing demand for housing and shifting demographics, London's residential markets could take lessons from Hong Kong on how to approach micro living.

PUBLISHED : Monday, 23 July, 2018, 2:17pm
UPDATED : Monday, 23 July, 2018, 2:38pm

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London's residential markets are struggling to meet the overwhelming demand for affordable housing in the UK capital. Growing urbanization, immigration and demographic changes are putting increasing pressure on a sector that's still beholden to standards defined over 50 years ago that are less relevant to 21st century urban living.

As in many countries around the world, the UK's planning system imposes a minimum standard on the size of homes, currently set at 37 square meters. Designed to protect low-income families from having to live in cramped and inappropriate conditions, these considerations don't apply in the same way to other demographics that now account for more than half of London households, according to data from CACI.

This is especially the case for young single professionals and house sharers who comprise almost a third of London households (32 percent, or 1.1 million people). Research from housing association Catalyst found that 48 percent of single people in London can't afford to pay the rent in traditional housing models, while demand surveys show that many are willing to sacrifice private space for a good location and access to amenities.

This begs the question of whether micro living and co-sharing solutions could have a role in addressing London's supply shortage.

Does size matter?

Micro living covers a spectrum of housing situations that provide personal living space below recommended limits. Jones Lang LaSalle in collaboration with the British Property Federation identified the three distinct micro living styles as:

1. Shared living – converted or subdivided houses (HMOs)

2. Co-living – purpose-built managed developments with shared amenities

3. Compact living – self-contained smaller homes

All three approaches can already be seen in the UK to varying degrees. Shared living has been widely practiced since the Housing Act 1985 permitted landlords to lease homes to three or more renters, while recent years have seen an increasing number of smaller homes being built in the UK, despite the planning requirement. This includes high-profile shared living projects such as The Collective, which currently offers 500 beds with personal living space of just 12–16 square meters and shared amenities.

JLL and BPF's research determined that the minimum amenities required for any home, regardless of size, are: a bed, toilet, shower, sink, cooking facilities, fridge, washing machine, table, sofa or arm chair and storage. Just as families share many of these amenities in a home, unrelated people can also successfully co-habit while retaining their own personal living space, although co-living arrangements are only recommended for renters and not as a permanent solution for owner-occupiers.

While minimum space standards offer protection for residents against exploitation, micro living can create comfortable and affordable homes for those with modest requirements, as long as developers follow good design attuned to residents' needs.

Can London learn from Asia?

As the most prominent example of a city making the most of limited available space, Hong Kong's residential market provides examples to London and other high density cities about approaches that can be taken – and what should be avoided.

Hong Kong has no minimum threshold for the size of homes, which has led to micro apartments as small as 20 square meters entering the market. While these satisfy many residents' needs, the high demand for affordable housing and lower downpayments appealing to investors led to these 'nano flats' costing almost 10 percent more in square footage than larger properties in 2017, according to the Land Registry. This demonstrates that micro living is not a solution in itself and highlights the importance of standards and controls in residential markets.

Shared and co-living arrangements are gaining popularity in Hong Kong as an affordable alternative to cramped apartments. The concept is also catching on in China, particularly among students and tech and creative professionals in Beijing's Haidan district and other cities including Chongqing and Guangzhou. Co-living is also expected to take off in Singapore, which maintains a minimum size requirement of 35 square meters to discourage micro living despite similar levels of demand and density.

The latest version of the London Plan, which lays out the city's strategic framework for development, recognizes the value of shared living developments as a short-term rental solution, while maintaining that these should be “appropriately sized to be comfortable and functional for a tenant's needs.” While micro living is not a silver bullet to fix London's housing shortage, a combination of approaches with appropriate checks and balances in place could help significantly to ease the pressure.

Associate director of residential research for JLL UK, Nick Whitten, explains: “In a world where households are smaller, we are living longer, and urban living across the planet is getting less and less affordable, we should be far more open-minded about the full spectrum of housing solutions available.”

For more information about London residential properties, click here or contact JLL International Properties at +852 3759 0909 or [email protected].