Microflats: making cities affordable, or unliveable?

U+I has launched a new microflat product that it hopes to develop in its thousands to help the “squeezed middle” living in the centre of London.

Dubbed Town Flats, the compact flats come as small as 19 sq m – half the 37 sq m required by planning guidance – but use efficient storage and design to feel larger.

U+I’s Richard Upton says that the flats can be built “without subsidy”, which means that U+I can compete with other land buyers in the centre of London to build a product it describes as affordable.

“We do reasonably well for providing for the very lowly paid in social housing, reasonably well for the super-rich…. But what we really miss is the squeezed middle,” he said.

“We see a lot of innovation and product development in the car industry… but look at the pace of change in the product of housing and it’s so slow, it’s a dinosaur. We need to create things that meet the problems we have in society.”

The 19 sq m apartment is half the size of the 37 sq m recommended in London guidelines. Click on the images and move your mouse to pan around the room

U+I wants to develop the blocks for the rental market, and says rents could be between £700 and £1,100, staying in the one-third of salary range, targeting £35,000 to £65,000 of income.

Essentially, the model doubles the number of flats in a scheme, which means rents can be lower, while the company pays the same land value as other developers. Because of their smaller size, the microflats could be built within zone 1 and still be affordable for those paying the London Living Rent.

Upton says U+I has five central London sites already being consulted on, each of which could hold 200 to 300 flats. He would like to do three schemes in each of the 10 central London boroughs.

U+I is still consulting on how to the hold the flats, whether through forward funding or its own rental company.

Upton says: “If you are relying on some subsidy, by definition you don’t have a commercial model. And I think our whole point is to compete with alternative land values.

“We can work land value a little more effectively because the density of our productivity per square foot is better.

“One of the key objectives of our business model here is to compete with any other land value in central London. That’s the tipping point that might really allow us to roll this out.”

The 24 sq m apartment could command rents of up to £1,100 per month. Click on the images and move your mouse to pan around the room

The two mock-up flats, which have been built in U+I’s Victoria office, will be used to show off the concept – to counter the “rabbit hutch” and shoe-box arguments against smaller flat design, and to influence planners and decision markers.

Currently, planning regulations mean flats such as these would be allowed only as an exception, which could add delays and risk to large-scale development.

A debate around microflats on twitter has seen them described as the ghettos of the future, bedsits – or, like aspirin, you take one only because you have to.

Upton says: “Sometimes it’s the psychology of space that’s important, rather than the floor area.

“This is not a home for a couple and clearly not for children, and the construction of how one might use these things is as important as the design standards and the space standards.

U+I is hoping to also show off the design to various bodies that own land in central London. Under the social value charter, all public institutions have to consider the best social value for their land, as well as the best financial outcome.

“They need to see optimised land value and the right benefit of public goods from that development, so we have been careful here to model something that can compete with alternative land uses, something that does not need any subsidy.”

The bathroom in the 19 sq m apartment. Click on the images and move your mouse to pan around the room

U+I is a listed company, and while the flats would be “affordable”, they still need to make a profit for its shareholders. Upton says this can be done through longer-term thinking.

“If you are a listed property company that wants to be a great property company for the long term, then you need to constantly challenge the market and provide a product for what’s missing.

“If we can respond to issues and create a new product, then we will have a competitive advantage. We only need the right risk-adjusted return. We don’t have to have a super profit on every project.”

For the moment, nothing is set is stone, and U+I has built the flats as a proof of concept as much as the next stage in its models. However, it will be hoping that it can say to planners, authorities and funders that its model is the future of inner-city living.

“We have been living with historic regulations on space standards, daylighting, the proximity of buildings since the 1970 and 80s and most of those regulations came from a suburban context.

“Since then London, like many other cities, has become increasingly urbanised as people move. But, regarding ways to provide homes for that increasing migration back into the city centres, and to make them affordable, there has been very little response at all.”

A view of the 19 sq m apartment from the “bedroom”. Click on the images and move your mouse to pan around the room

Hollow London

Alongside the flats, U+I and Development Economics have produced the Hollow London Report, which says compact living developments could bring an additional £200m of income and just over 1,000 new jobs to central London.

The report compares the social and economic affects of its compact living approach with more typical central London developments.

The study assumes five town flat developments sites would be developed in each of the nine inner London boroughs. It finds that the compact developments would:

house 3,555 more working age adults than typical accommodation on the same sites;

deliver an additional £202.5m of household expenditure a year;

support 1,035 more local jobs; and

provide 4,770 more homes.

Micro and Co-living spaces?

Of course, U+I is not the first firm to explore the microflat space.

At one end of the spectrum, Dolphin and Pocket are developing smaller flats for the rental and sale models respectively – though these are space standard compliant.

Dolphin has a pipeline of nearly 1,000 rental homes, while Pocket has hopes to deliver more than 4,000 by 2023. Both are expanding their pipelines, but rely on ties ups with the public sector to increase viability.

The Collective, meanwhile, brands itself as a co-living space provider that focuses on micro-rooms but a lot of amenity space. Its flagship scheme at Old Oak is currently up for sale for £100m.

Other smaller flats have also be developed through permitted development rights, though this trend has upset many councils.

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