Online rental brand, Residently has reported strong growth across the city’s tech centres. Shoreditch and burgeoning hotspots King’s Cross, Hammersmith & White City, Soho and Battersea to name but a few. Soho in particular, has seen substantial growth over the past year, with rents of one and two-bedroom apartments increasing by 26%, compared to tech stalwart Shoreditch, which experienced growth of 1.7% over the same period.
London’s tech growth has hit an all-time high, with global firms investing heavily in London offices, despite the shadow of Brexit. In fact, London now employs more people in the technology, media and telecoms sectors than it does in finance. The rise in collaborative and creative co-working spaces has also contributed to the success of these hubs, acting as a ripple effect on the wider local environment, as new cafés, bars and shops spring up to support workers. In particular, this “tech ripple” has transformed a number of downmarket locations across London into places where people really want to live, as well as work.
Tech giants do all they can to attract the best talent, which means not only creating inspiring and impressive workspaces, but reinforcing their location as the best place to be. This in turn is having a knock-on effect on office rents. This is particularly prevalent in London’s original “Tech City”, which emerged in the late noughties when a cluster of web-based businesses settled in the area. Following the recession and a period of reduced rents, the area around the Old Street roundabout became affordable to start-ups, whilst redundancies in the financial sector released significant entrepreneurial talent into the market.
Since then, office rents have increased considerably and last year, office rents in Shoreditch overtook those in the City of London for the first time in history. The impact of this on the residential market has been substantial, with property values rising sharply over the past decade. Rental values for one and two-bedroom apartments in the area have grown by 1.7% in the past year, with an average two-bedroom property demanding £2,440 per month.
However, Tech City’s rising office rents has caused many firms to look elsewhere. In fact, a number of Silicon Valley firms including Google, Facebook and Apple have selected other areas of London for their UK headquarters. King’s Cross has become a popular spot for both tech giants and flourishing start-ups, with Google’s £1bn HQ and Facebook’s plans to open a HQ in King’s Cross Central, which at over 700,000 sq.ft. will triple the firm’s footprint in London. The impact of this news combined with significant local redevelopment, has transformed King’s Cross into one of London’s hottest destinations. Residently have found that rental values have increased by 13% over the past year, with significant demand coming from nearby workers.
Trevor Stunden, CCO at Residently, comments; “We are experiencing strong demand for rental properties in areas such as King’s Cross and Shoreditch. People no longer want to slog across London to reach their office, meaning the quality of housing in areas surrounding tech headquarters has continued to improve as workers relocate to be near work.
The way we live has completely changed, gone are the days of a job for life or a home forever. People no longer necessarily want to purchase a property in the capital, especially if they work for a start-up, or international tech firm that could take them abroad at any time. People want the flexibility to move around and at pace. Business is constantly on the move and we appreciate that finding a property can take a huge amount of time and energy, which is why we have developed an online process that is efficient, quick and can be done remotely.”
Of all the major tech hubs, Soho has experienced the sharpest increase in rental values, with a strong 26% increase over the past year. The presence of Snapchat and Twitter, combined with the long-established creative industries has continued to drive growth, whilst the upcoming opening of Crossrail has opened the area up to commuters who wish to rent near their offices during the week.
Further west, Hammersmith & White City is working hard to become a full tech hub in its own right. Imperial College London has joined forces with Hammersmith & Fulham Council to create a global beacon for biotech, digital and creative industries, whilst recent additions to the area include Yoox Net-a-Porter’s 7,000 sq.ft. Tech Hub, co-working space Huckletree West, as well as the latest Royal College of Art campus.
In recent years, Hammersmith has attracted household names including Disney, General Electric, L’Oreal and Fox TV, which in turn has driven consistent demand for rental properties. One and two-bedroom apartments have a seen healthy growth of 3% over the past year, as young professionals and couples take advantage of the excellent employment opportunities and transport links in and out of London.
South of the river, the news of Apple’s new 500,000 sq.ft. London campus at Battersea Power Station has cast a spotlight on the area. The relocation of the new American Embassy at nearby Nine Elms and ambitious plans for retail and leisure is also set to pull in millions of visitors every year. An extension of the northern line will also link Battersea to the rest of the capital and open Battersea up to workers from all across London. The additional benefit of excellent local schools has boosted rental values by 8% over the past year, as workers and families try and beat the boom.
Trevor Stunden, comments; “Residently was formed by technology and real estate experts, so we really understand the complexities behind the renting and how technology can improve this process. Although we originated in London, our long-term vision is to provide homes in every major city and make moving between these cities as easy as moving between neighbourhoods.”
All our properties are beautifully presented and have utilities and high-speed Wi-Fi already set up along with designer furniture if the tenant wants. Many of our current tenants are based in the local area for work and appreciate being able to move straight in. They can unpack, get their laptop out and settle in without hassle”.
Our flexible contracts are suited to modern day renters, not locking them into lengthy commitments. A huge benefit of our network of properties is that our residents can move between our properties seamlessly within a single agreement. We plan to expand to all major tech-hubs in the coming years enabling this to happen internationally."
