New Westminster Plan has impact on prime resi sector
It has been years in the making, but the new Westminster City Plan has just been published, providing a clear way forward for future development opportunities in the central London borough. The new rules and restrictions are set to last until 2040.
Westminster is one of the UK capital’s largest boroughs, stretching from the Thames in the South to Regent’s Park in the North, but it is also one of the most densely populated, with 12,000 residents per square km compared to the London average of 5,700. It includes deprived areas as well as wealthy enclaves like Mayfair.
The plan’s main objectives are to increase housing delivery with a focus on affordable homes. The target minimum percentage of affordable housing in developments has been increased to 35% for new developments, or 50% if it is on public sector land.
The other main goal of the plan is carbon neutrality by 2040, with a clear requirement for all major developments to be zero carbon with any remaining carbon off-set via a payment. Retrofitting existing buildings is also being encouraged.
So far, so good. What is more controversial in the plan, however, is a new maximum housing size of 200 sq m for new residential developments.
“The purpose of this policy is to ensure that Westminster’s scarce land supply is optimised, with new units over 200 sq m seen as ineffective use of land,” said Matt Richards, planning director, Savills. “This is likely to have notable implications for the prime and super-prime residential sector.”
New rules give large units rarity value
The new rules add a rarity factor to existing or newly built large-scale residential units, which are likely to become more sought-after and more expensive. The policy also runs counter to the post-lockdown demand for larger homes that have room for a home office.
“The new Westminster City Plan has firmly changed the residential landscape within the borough,” said Richard Rogerson, CEO, RFR, a prime London buying agent. “Newly built, supersized homes already built or in construction within Westminster will likely become even more of a prized asset as their days are numbered. It remains to be seen whether smaller properties will be as popular with owner occupiers and investors.”
In the short term, it is good news for developments like Almacantar’s The Bryanston, an 18-storey development at Marble Arch with views over Hyde Park, where 51% of the apartments are over 200 sq m in size.
“While everyone across the globe has spent the last year reassessing how we live in our homes, we have seen an increased demand from purchasers looking for large lateral apartments with generous spaces and natural light, and of course good views of green space”, said Lottie Geaves, sales manager, Almacantar. “This shift in priorities, coupled with the lack of supply of larger properties in the new-build pipeline in Westminster, will only add to the value of these apartments over time.”
Longer term it could be bad news for Westminster if it deters big spenders from investing in the area.
A new report published by Knight Frank this week highlights the resilience of the prime and super-prime market in the UK capital, which has overtaken Hong Kong and New York. In 2020, despite the pandemic and travel restrictions, more homes worth $10 million and more were sold in London than in any other city in the world. Sales reached $3.7 billion, a 3% increase on 2019.