Our eight development hotspots provide great opportunities to deliver both homes and employment spaces. However, to achieve the greatest potential for each location, developers, planners and communities must consider intensifying development to provide a broad mix of housing and commercial space with supporting shops, services, leisure facilities and amenities.

Our research shows that there are many areas of London where density is low relative to its transport connectivity, particularly in the outer boroughs. In a previous report, ‘Redefining Density’, we calculated that we could theoretically deliver 1.46 million new homes if density levels in areas of low density but good connectivity were increased slightly.

The tremendous potential to do more is reflected in amendments to the London Plan, giving greater policy support to densification in areas such as town centres of varying sizes from international centres in central postcodes to smaller district centres in the outer boroughs.

By definition town centres are focal points for communities and key locations for a range of activities from living and working to shopping and leisure. Hence town centres clustered around transport nodes can provide good opportunities for development across a range of uses at neighbourhood level.

Office and Resi

There is a symbiotic relationship between residential and commercial development that can help support local amenities and create a sense of place, if both are considered together at neighbourhood level rather than treated as separate entities.

Residents clearly value access to good local shops, cafes, restaurants and other leisure amenities and higher residential values near vibrant high streets illustrate this fact. However, retail and leisure facilities need day time trade to thrive. Local commercial workplaces provide this vital footfall.

Moreover, commercial occupiers moving out from more central areas demand excellent access to retail amenities whether this be included in the same scheme or on a nearby high street. Occupiers do not want to feel isolated and risk losing staff if there is a lack of retail amenity in close proximity.

Education, education

Schools and educational facilities provide similar benefits at a local level. Good schools are a draw to home buyers. Our analysis shows that there is a 19% house price premium around the 20 best performing state schools in London.

Furthermore, commercial occupiers are now seeking to be located near good educational establishments in order to secure the future of their labour force. The opportunity to establish a partnership with a local university has proved attractive to occupiers when considering relocating from central London.

In larger scale developments, particularly where new neighbourhoods are being created rather than enhanced, bringing forward a mix of uses rather than building a dormitory housing development, is a particularly effective way of creating a sense of place.

Time invested in planning and delivering the ground floor leisure and retail offering can pay dividends further down the line as we have seen with the Argent regeneration of King’s Cross.

The amenities act as a draw to commercial occupiers which provide greater footfall at an earlier stage of a big scheme than residential sales over several phases could achieve. However, place improvement enhanced by these amenities drive residential values.

Achieving the critical mass to support local amenities and social infrastructure can require intensification of land use. Ensuring that new mixed use developments are well-designed and high quality allows for greater densities to be achieved. The result is a better use of London’s scarce land and ultimately more homes and workplaces for Londoners.

Affordability and housing

We need to be building greater volumes at sub £450psf but the challenges of delivering homes at these lower price points are enormous. Finding suitable sites that are viable once build costs have been factored in is very difficult in the open market. Therefore, the disposal of surplus public land is key. There are challenges. When considering land value, the volume of demand should be as important a consideration as the headline pricing.

Developers investing in place making, or in areas where infrastructure is improving, expect value uplift, thereby pushing up to price points where there is less of a supply demand imbalance. Our analysis shows that there is a finite volume of occupier demand at higher price points, so care needs to be taken not to sacrifice absorption rates for high prices. This highlights the importance of providing a range of tenures and housing products targeted at people across a range of incomes to maximise take-up. Shared Ownership, Starter Homes, Help to Buy and Build to Rent all have a role to play.

^{▲ North West Village Terrace overlooks Wembley Stadium}

OFFICE EMPLOYEES’ VIEWPOINT

Length of commute is an important factor

Not everybody wants to work in the city centre. In fact, 29% would prefer not to be located in the centre according to our survey of office-based workers across the UK. Our YouGov survey was commissioned by Savills alongside the British Council for Offices.

The fact that many employees seem to aspire to eliminate the commute into central postcodes suggests there is an opportunity for employers to consider cheaper office floorspace options further out. But will the emerging locations beyond core London and towards the outer boroughs provide real alternatives to traditional employment centres?

We surveyed what office workers rate as important and compared that with their levels of satisfaction with their current working environment. The accessibility to the workplace is of major importance. Transport and the commute are the highest rated factors in chart 5. Only 17% of London workers commute by car compared with a 50% average for the UK. The time commitment of the commute for London office workers is clear in Figure 6. Around 54% of London office workers commute for more than 45 minutes compared to 25% for the UK average. As a consequence, for London, there is a direct relationship between the longer length of commute and workers’ lower levels of satisfaction which could potentially influence employers’ locational strategy in the future.

Similarly, despite clustering and related networking opportunities being important to 50% of Londoners, there is an extremely low level of satisfaction with this. This illustrates the potential for new locations to act as hubs for similar companies where like-minded employees can engage. For developers, within a mixed use development, this should certainly be a consideration and incorporated within the development of the newest and emerging office locations.

^{Source: YouGov, Savills Research, BCO}