Westminster council is considering introducing a new policy that would require developers of hotel schemes to include an element of affordable housing. The policy could be included in the new City Plan which is due to be released in November 2018.
Westminster’s current affordable housing policy requires all residential schemes to contribute 30% of the development, currently, this isn’t the case for commercial developments.
Commercial C1 use class is largely undersupplied in the UK and contrary to residential schemes, it has the added advantages of creating jobs and generating business rates, both of which benefit local communities.
A case in point, we helped our client seize this opportunity for their 19-unit residential scheme in Reading, which wouldn’t have been viable if it weren’t for our advised change to a commercial C1 use class.
How long will it be before other councils to follow in Westminster’s footsteps and seek to implement their own affordable housing policy for commercial schemes? In which case, the City of Westminster could have just created a sizeable window of opportunity for commercial developers, which is already starting to close. So it remains to be seen how this new policy could potentially change the future of commercial development, and who’s to say that other commercial use classes won’t be affected?
For this reason, we’re encouraging our developer and investor clients to consider alternative options such as serviced apartments. The serviced apartment sector is flourishing in the UK and can be developed with C1 use class. Serviced apartment operators also offer additional benefits as they are prepared to commit to leases in excess of 10 years, providing landlords with long-term guaranteed income. Saxbury’s relationships with these types of operators makes us well placed to determine the key demand hotspots across the UK.
If you’re struggling with the viability of your residential development and are keen to explore other options, contact our team of serviced apartment experts for a free appraisal on your scheme.