By Rajdeep Gahir, co-founder and chief executive of Vivahouse, a revolutionary housing concept that creates pre-fabricated, flatpack units which are installed into unused commercial sites.
House building is at its lowest period since the 1960’s, with the UK having a backlog of nearly four million homes in 2018. It is estimated that the government now needs to build 340,000 units a year until 2031 to keep up with this rising demand, a figure significantly higher than the government’s original evaluation.
However, despite this need for housing, the time between permissions granted from local councils and tangible homes being built is at its longest. As a result, more people than ever before have turned to renting, with millennials and young professionals being forced into commuter towns, paying rents that take up over a third of the household income.
We now need to offer new, alternative and economically viable solutions for those priced out of the available housing market. We cannot keep using old means as an answer.
In 2018, the retail industry was hit by a wave of store closures with over 1,000 retailers in the UK, including the likes of House of Fraser and Poundworld, going into administration between January and September. This has resulted in more than 20,000 commercial properties – the equivalent 2,700 hectares of land – standing empty on some of the most sought after prime real estate across the capital, with no signs of future re-development plans or occupancy.
Moreover, demand amongst prospective tenants for retail units fell by 22%, reaching the lowest levels since 2011, making retail the only market to see growth in the availability of usable space in central locations across UK cities. With an independent review suggesting that the ecommerce boom could leave up to 100,000 shops empty within a decade, this presents a new opportunity to re-direct the fate of our failing British highstreets.
This issue also spans beyond retail. The flexible and co-working working revolutions have meant a streamlined approach to office space in the UK’s cities, resulting in more standalone office blocks coming to market than ever before. In 2018, it was reported that of the available commercial spaces, 90 per cent have been unoccupied for at least six months, with just under 50% (10,600) being offices.
So, as start-ups and large corporates move over to shared workspaces, and the bricks and mortar retailers move to e-commerce, what happens to the dead space that’s left behind?
The UK commercial property market is traditionally characterised as being risk averse and slow to innovate but transforming these empty spaces into alternative forms of accommodation may be one of the most pragmatic options. Over the past years, new trends have emerged; pre-fabricated and modular housing have both started to successfully challenge the status quo with boosted investment in the sector.
With up to 80% of work being done off-site, modular homes can be constructed in 50% of the time compared to traditional structures, resulting in lower labour costs and reduced material input. Therefore, by looking to alternative property solutions such as these, we can trigger a significant change in the speed, quality and quantity of spaces being built.
For the rental market, pre-fabricated units could enable true co-living as a service – this would be a revolutionary way to amend the current quality of flat shares. For London in particular, where it’s predicted that 60% of Londoners will be renting in nine years’ time, this is a vital step to avoid slum rental housing as a living standard. For the buyers’ market, this approach will enable speedy delivery, low cost prices for first time buyers if readily available of the government’s Help to Buy scheme and – if procured effectively – create quality homes for low-income households when the UK needs it the most.
As we begin to work our way out the housing shortage by using innovative schemes like PDR and pre-fabrication, it’s also important that we unanimously work to improve the rental market at the same time, only then will we see true change in Britain’s housing market.
Ultimately, the demand for rental housing across the capital is only set to increase. Therefore, by transforming disused commercial sites, we can allow otherwise forgotten and derelict spaces to be rejuvenated and offer the UK’s renters the quality homes they deserve.
