East London: Who Is Renting Here?

Statistics and Reports, UK Property

A huge new data analysis exercise undertaken by institutional/build to rent revenue enhancement platform Houzen has revealed some exciting glimpses of who is renting in East London and why. The results challenge many established assumptions about renters and what they are looking for from their East London homes.

According to JLL’s European Multifamily Investment Market report, London is now the fourth best European city for  Build to Rent investment, having jumped two places as a result of its dynamic Build to Rent sector. Investment in Build to Rent in London rose from €1,100 million in 2017 to €2,030 million in 2018. The huge leap means that the overall Build to Rent sector in the UK is now worth €6.8 billion.

“The Build to Rent sector is expanding rapidly and East London is one of the hottest areas of the city for its growth. Renters are delighting in how much this vibrant part of London has to offer, from its employment opportunities to its cultural, entertainment and retail scene. Demand for top-notch rental homes that come with a range of added extras is strong and sustained.” Rob Csercse, Head of East London Sales, Houzen

London is home to more Build to Rent (BTR) units than any other UK city. In fact, it’s home to more BTR units than the rest of the UK’s cities altogether. The BPF reports that there are 74,580 units in London, versus 68,419 outside of the capital.

Huge swathes of redevelopment in East London – Canning Town is a prime example – are leading to an exciting mix of new homes, retail outlets, restaurants and transport connections. Crossrail, too, is coming into play. So, who’s looking to live in these new homes and in particular in the rapidly growing BTR sector?

According to Houzen, which acts as a global demand aggregation platform for the build to rent sector, the traditional image of Canary Wharf being packed with professionals is now a far cry from the truth. High-end E14 rental apartments are now being sought after by Chinese students, more than any other demographic.

The finding is based on a year-long piece of research undertaken with Houzen’s 1,200+ East London partner agencies and covering more than 2,000 units of accommodation. Canary Wharf’s proximity both to central London universities and to potential future employers turns out to make it the ideal location for young people coming to the UK from China for their higher education.

The findings also challenge the idea that Build to Rent homes are mainly for young professionals who work from home regularly and can’t live without their gym sessions. Sticking with Canary Wharf as an example, Houzen reports that the new wave of BTR tenants are those of retirement age. After selling their empty nests of the outskirts of London, they are moving inward to be closer to family, either to help take care of grandchildren or simply to enjoy more of London life. The perfectly maintained environment and tight security of Canary Wharf are appealing to older renters, while landlords benefit from the fact that senior tenants tend to relocate less often and rent their homes for longer, thus generating greater revenue.

It is the analysis of data in this way that has allowed Houzen to quickly become London’s premium customer acquisition platform. The company has identified a host of insights into who is looking for what and where in East London.

“One of the most exciting features of our platform is the ability to drill down into very specific areas to discover targeted pockets of demand. The market knowledge that this provides is staggering. It allows landlords and letting agents to connect with the tenants who are most valuable to them.” Saurabh Saxena, Founder, Houzen

Aldgate East is one such area. It holds broad appeal to professionals working in the city and students from Asia. Houzen found that larger homes there, in the form of three and four-bedroom apartments, were particularly attractive to sharers from South America, who have come together to work in London. These renters particularly value premium units, as well as living close to Shoreditch, with its mix of skyscrapers and famous East London hipster vibe.

Another example of Houzen’s data analysis being put to use is East London’s swanky penthouses. No longer are they solely sought after by rich families – there’s a new wave of affluent youngsters looking to live in serious style in the capital, as Youtubers and esports stars splash their cash on some of the area’s hippest homes (with a total prize pot of £76 million last year, it’s clear that esports has become seriously big business).

Houzen is a global demand aggregator with an ambitious vision of aggregating tens of thousands of channels to produce near time results. Its bespoke algorithm and deep data approach is supporting institutional investors to fill their homes faster, with tenants who want to stay for longer. By understanding an area’s appeal to different demographics in such astounding detail, the company is uniquely placed to benefit landlords, investors and tenants alike.

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