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City-living apartments are springing up across the town centre, with a multitude on the Waterfront. They are proving to be very popular with young professionals who frequently share a two bedroom property and enjoy the lifestyle afforded by being so close to work and the bars and the clubs. New apartments are clean, modern and self-contained, usually roomier than renovated older properties, and soe even enjoy a view.
But while some are occupied, others remain empty, with an overall feeling that there are insufficient residents to form a community. So who is buying, and can afford to leave vacant substantial numbers of flats? Who are the investors who can afford to mothball new homes?
Sharp investors are prudent with their money. There are traditionally three different markets that offer a return on large scale deposits – stocks and shares, bonds and other government borrowings, and property. If we look back at the relative merits of each over the last ten years property (particularly the domestic market) has outperformed not only the others but substantially outperformed investments such as building societies.
There are other reasons why these multi-storey apartments aren’t let. They tend to be geared to limited demographic groups. Certainly 18-30 year old singles are a prime target, offering them a chance to get on to the housing ladder before getting hitched. And couples whose offspring have flown the nest and want to ‘downsize’, not necessarily to a smaller property but one that is easier to maintain, more convenient for access to amenities and ‘safer’ by being above ground. But they are not for families. Planners may insist on developers’ contributions to schools and play spaces but high rise balconies are no place for an inquisitive toddler.
So it’s city investors using their bonuses to snap up much needed new homes, then sitting on them for a few years; buy-to-let investors who were really hoping for a tenant but are still seeing the value of their investment climb; and the banks, who lent the major slice of capital in the first place, happy if their bottom line is in double figures. Developers are of course keen to sell to investors who are more likely to buy ‘off-plan’, who have the capital rather than the delays of a mortgage purchase, and are likely to buy more than one property.
The losers are the community the other tenants who don’t have the benefit of neighbours for company, the businesses trying to sell the ground floor spaces as restaurants and retail outlets, but most importantly the wider community who see empty apartments and miss out on the contribution these potential residents could be making to the town.
John Norman