Housing Core Strategy Review Issues and Options

Housing Issues and Options

Wider Housing Market Issues

14 Issue: A Suitable Mix of Housing Sizes: 'Super-Prime' Units

Issues

14.1      In recent years the Royal Borough has seen an increase in planning applications for ‘super-prime’ developments. These are luxury, high-end, high-specification developments typically of very large units in excess of 500 sq m[10. These cater to international investors. A recent article by Savills states that Global billionaires are footloose individuals who can, and do, make any country their home. A property in one or more of our class of world cities is an essential part of their lifestyle. It provides access to their global business interests, allows enjoyment of a wide range of retail and cultural attractions, and is often seen as a mark of status and success…..A property transacted in 2008 in London’s Kensington Palace Gardens tops the list at £8,500 per sq ft.”  (http://www.savills.co.uk/research_articles/141280/142344-0)

14.2        The importance of London as a world city is embedded within the vision of London in the London Plan (July 2011) “Over the years to 2031 – and beyond, London should: excel among global cities.....” The vision for the Royal Borough as set out in the adopted Core Strategy also seeks to “enhance the reputation of our national and international destinations.” Whilstthis is focused more on the unique retail and cultural offer of the Royal Borough there is an argument that different London boroughs should fulfil different roles and that the ‘super-prime’ market is important for encouraging economic growth and making London an attractive city in which to invest. On this basis it could be argued that it is appropriate for the Royal Borough to provide this niche role. 

14.3        Therefore in this context super-prime units provide an important function for London as a global city. However the size of these units and their cost can have implications for the number of residential units delivered in a small number of housing schemes. 

14.4        The areas where such properties are located tend to be high density residential areas. The Royal Borough has a legacy of Georgian and Victorian terraces that are laid out in a network of streets, often including garden squares, of the highest quality. The late Victorian and Edwardian periods saw a shift away from town houses to the mansion block, allowing buildings to be slightly taller and thus, as we see today, of higher density.

14.5        The London Plan density matrix (London Plan 2011, Table 3.2) sets out density ranges according to the character – suburban, urban and central. Notes to the table state “Appropriate density ranges are related to setting in terms of location, existing building form and massing, and the index of public transport accessibility (PTAL). As stated above, super-prime flats often have a floorspace in excess of 500 sq m. For example a single flat in RBKC with an area of 800 sq m catering to an international investor is large enough to provide 10 flats each with an average area of 80 sq m.

14.6        It should be noted, however, that the scale of the issue so far has not been especially significant. Only in a few new developments have very large units reduced the number of dwellings that could be provided. It is, however, possible that such units can be bought by international investors as second homes and may remain empty for most of the year but it should be stressed that this is not always the case.

14.7        It can be argued that very large super-prime units are part of the overall housing mix that the Council should be considering, particularly having regard to the recognised global importance of London. The issue maybe more one of ensuring that they are provided as part of a suitable housing mix.



[10]There is no accepted definition of a ‘super prime’ unit based on floorspace, but the price, specification and location are determining factors.  It may be an option to define what we mean locally as super-prime, either by area, or as a multiple of minimum space standards.

Options

Option 1: Continue with the status quo i.e. take the view that it would be imprudent to interfere with the market and continue to assess applications for low density super-prime units on their own merit.

Pros

    • Contributes to the London Plan vision of London as a Global City.
    • Could have a positive impact on the local economy.
    • Contributes to the UK economy and the London economy.
    • Could form part of a suitable housing mix if brought forward as part of a mix of units.
    • Part of the niche role that Kensington and Chelsea plays and can contribute to the outstanding townscape of the Borough.

Cons

    • Reduces the number of residential units that can be delivered on certain sites (although it is not a wide spread phenomenon). 
    • In some cases may lead to under occupation with absentee owners for part of the year.

Option 2: Allow for super-prime units in schemes but as a small proportion of the overall mix.

Pros

    • Contribute to the London Plan vision of London as a Global City.
    • Would contribute to a diversity of housing.
    • May contribute to the local, London and UK economy.
    • Part of the niche role that Kensington and Chelsea plays and could contribute to the outstanding townscape of the Borough.
    • Whilst it may not maximise the use of residential land it would help to optimise delivery and provide a diversity of housing. 

Cons

    • It could reduce the maximum number of residential units that could be achieved on a site.

 

Option 3: Resist super- prime units in new residential developments recognising that this market can be catered by an appropriate de-conversions policy (see section 15). 

Pros

    • It may enable more residential units to be delivered on a site.
    • It may enable the creation of a greater diversity of housing on a particular site.
    • It may help to stimulate community life if super prime units were permitted to dominate the housing market in Kensington and Chelsea.

Cons

    • May reduce the opportunities in Kensington and Chelsea for the provision of super prime housing and investment opportunities move elsewhere.
    • Would not contribute to the niche role that Kensington and Chelsea plays in catering to the housing needs of the international investor.
    • Would not contribute to the London Plan vision of London as a Global City
    • Would not contribute to the UK economy and the London economy.
    • May dilute a housing mix if part of a mix of units.