<p>The Prime Central London sales market picked up at the end of 2019 as the General Election result injected positivity and a more certain outlook. Looking forward, the rise in turnover witnessed in Q4 should follow into Q1, with a stronger rally in transactions
    as more buyers and sellers return to a more liberated market. </p><p>The Prime Central London lettings market is facing an acute shortage of properties to let, which has led to the highest rate of annual rental growth for over seven years. 2020 could be a year of mixed fortunes for the lettings market. Greater political
    certainty is likely to bolster rental demand. Nevertheless, the improved performance of the sales market may draw away some lettings demand.</p><p>Want the full picture on Prime Central London&rsquo;s sales and lettings markets? Download the report here for a look at what happened in Q4 and what&rsquo;s to come: </p><button class="Button primary"><a style="color:#ffffff;" href="https://res.cloudinary.com/jll-global-olm-np/image/upload/v1579100200/resi/gb/cms/Research/PDFs/JLL_PrimeCentralLondon_Jan2020.pdf">Download the report </a></button>

Prime Central London – January 2020

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Our latest research explores the performance of the Prime Central London sales and lettings markets in Q4 in 2019, in addition to what the future holds in 2020.

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Our latest research suggests that 2020 will be a year of recovery for the Prime Central London sales market.&nbsp;

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<p>The uncertainty hanging over the UK economy since the 2016 EU Referendum should now gradually subside following the Conservatives&rsquo; majority win in the General Election.</p><p>With a parliamentary majority, the Prime Minister&rsquo;s deal with the EU is expected to pass and the Article 50 process will end on the 31<sup>st</sup> January 2020. The nature of the future relationship between the UK and EU will be a key feature of
    2020 but there will at least be a greater degree of certainty for business. </p><p>The pound has shown signs of strengthening following the election result, while the economic fundamentals such as employment and real wage growth will help to underpin confidence. The greater certainty in the outlook &ndash; for households, businesses
    and housebuilders &ndash; should in turn lead to notable increases in house prices, housing transactions and housing starts across all regions of the UK. There is also expected to be an uptick in investment activity in the student and multifamily
    sectors.
</p><p>Against this political backdrop JLL has identified the fundamental certainties which will shape housing delivery in the coming years. These certainties sit alongside our <a href="https://residential.jll.co.uk/insights/research/uk-residential-forecasts-2020">positive housing market forecasts</a> for the next five years.<u> </u></p><ol><li>Housing will remain a key item on the political agenda:
        <ul><li>The focus will remain on supporting first time buyers. Help to Buy will remain in place until at least 2023.</li><li>Pressure will continue to deliver more Affordable Housing with 1.1m people on the current social housing waiting list.</li><li>Parents are having children later in life which is delaying the desire to purchase family-sized homes and supporting the growth of renting,</li><li>People are living longer creating the need to deliver more elderly-appropriate housing &ndash; some 25% of the UK population will be over 65 by 2030.</li><li>There will be an additional 2.5m people living in UK&rsquo;s urban areas by 2024,</li><li>The need to densify housing and provide flexible and shared living spaces is fuelling the rise of alternative sectors such as coliving.</li><li>London is ranked by JLL&rsquo;s Cities Research team among the seven established world cities,</li><li>The UK Capital is particularly strong for its growth in digital sectors and its ability to nurture talent &ndash; there are more high-ranking universities in London than any other city in the world.</li><li>25% of Britons no have multiple smart devices in their home. </li><li>The thirst for technology will continue to grow meaning homes will continue to accommodate ever more automated devices.</li></ul></li><li>Fundamental population changes will occur:</li><li>Towns and cities will see the highest housing demand:</li><li>London will remain at the world&rsquo;s top table:</li><li>There will be ever more connection between living and technology</li><li>Climate and social awareness will continue to accelerate:</li><ul><li style="margin-left:60px;">All new homes will need to be Net Zero Carbon by 2030</li></ul></ol><p>&nbsp;</p><p>Developers will adapt housing delivery to meeting growing demands around economic, environmental and social impact.&nbsp;</p>

General Election 2019 – JLL Living reaction

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Commenting on the large majority win for the Conservative Party, Nick Whitten, UK Director of Research at JLL

Commenting on the large majority win for the Conservative Party, Nick Whitten, Head of UK Living Research &amp; Strategy at JLL, says:&nbsp;

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<p>With rising demand for higher education set to see full time student numbers grow a further half a million by 2030, PBSA has become a lucrative ticket for real estate investment. </p><p>Our latest Student Housing Report highlights how investor appetite remains robust due to the sectors defensive, income-producing characteristics, despite a number of challenges including a fall in development pipelines and growing rent affordability concerns.
</p><button class="Button primary"><a style="color:#ffffff;" href="https://res.cloudinary.com/jll-global-olm-np/image/upload/v1576764871/resi/gb/cms/Research/PDFs/JLL_UK_Student_Housing_report_2019.pdf">Download the report </a></button>

UK Student Housing Report 2019

This report explores how supply pressures for UK purpose built student accommodation (PBSA) will drive future demand

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<p>Coliving is fast becoming a key component of the wider suite of housing solutions designed to meet the changing needs of urban populations, but what is it and what is the scale of demand across Europe?</p><p>While the estimated 23,150 coliving beds (built or in the development pipeline) represent a fraction of the size of other Living sectors, the speed in which this new sector has grown in the last two years indicates that it will become a prominent part
    of the Living market.</p><p>Our JLL European coliving index explores the size of the coliving market and identifies the top 40 markets across Europe that either already have a strong coliving presence or present longer-term opportunities.</p><button class="Button primary"><a style="color:#ffffff;" href="https://res.cloudinary.com/jll-global-olm-np/image/upload/v1575019172/resi/gb/cms/Research/PDFs/jll-european-coliving-index-2019.pdf">Download Report</a></button>

JLL European Coliving Index 2019

This report explores the opportunities within the coliving market across Europe and provides insight into the key factors driving demand in this sector.

European Coliving Index 2019

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<p>JLL&rsquo;s Residential Forecasts will help you through this period of constant change offering valuable insight on:</p><ul><li>Brexit, domestic politics and the UK&rsquo;s future economic performance</li><li>House price growth, housebuilding and housing transactions</li><li>Where developers and investors should focus their capital</li><li>Policy shifts affecting First Time Buyers through to Seniors</li><li>Changing housing preferences and the role of BTR/Multifamily</li><li>How technology will change UK Living</li><li>Climate crisis and its impact on UK Living</li></ul><div style="margin:15px;"><a href="https://res.cloudinary.com/jll-global-olm-np/image/upload/v1574695786/resi/gb/cms/Research/PDFs/JLL_Forecasts_-_Living_with_2020_vision.pdf" target="_blank"><button class="Button primary">Download Report</button></a>
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UK Residential Forecasts: Living with 2020 vision

Our Residential Forecasts: Living with 2020 Vision will help you navigate residential real estate in 2020 and beyond.

<p>Its now more than three and half years since the EU Referendum and we are still living in a period of uncertainty. In fact, uncertainty has now become the new certainty. Our Living with 2020 Vision research will help you through this period, navigating residential real estate with operational and insight-led insight.&nbsp;</p>

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<div><p paraid="65283148" paraeid="{c44dffb0-ace1-4c91-9420-54fffbb77cfc}{188}">Based on our latest report&nbsp;<a href="http://residential.jll.co.uk/insights/research/city-dynamics" target="_blank" rel="noreferrer">European City Dynamics</a>&nbsp;and its exploration of shifting populations,&nbsp;our latest blog delves into&nbsp;the changing picture of&nbsp;how individuals interact with a city throughout their lifetimes&nbsp;and the impact of this on future European housing demand.&nbsp;&nbsp;</p></div><div><p paraid="2018664730" paraeid="{c44dffb0-ace1-4c91-9420-54fffbb77cfc}{209}"><a href="https://www.jll.co.uk/en/campaign/living" target="_blank" rel="noreferrer">Living</a>, as an asset category, is fundamentally about people &ndash; who they are, what life stage they are at,&nbsp;and how they want to live.&nbsp;Demand for&nbsp;different homes&nbsp;comes from&nbsp;all&nbsp;age groups&nbsp;&ndash;&nbsp;so understanding&nbsp;age profiles, and how they are forecast to change,&nbsp;is one way to look at&nbsp;pools of&nbsp;relative demand&nbsp;at a national,&nbsp;city and&nbsp;local level.&nbsp;&nbsp;</p></div><div><p paraid="1406556350" paraeid="{63e70322-0598-44ef-814f-24f412a282aa}{3}">Between the centre and suburbs, a city&rsquo;s demographics can change markedly, with a range of implications for planners, legislators, developers and investors.&nbsp;Cities&nbsp;often&nbsp;extend beyond their administrative boundaries, into&nbsp;Functional&nbsp;Urban&nbsp;Areas&nbsp;(FUAs), of which there are 64 in Europe with a population of over one million.&nbsp;48% of their populations live in the city, while&nbsp;a small&nbsp;majority&nbsp;live in the commuter belt.&nbsp;&nbsp;</p><p paraid="1406556350" paraeid="{63e70322-0598-44ef-814f-24f412a282aa}{3}"><b>Figure 1: Functional Urban Areas with population in excess of 1 million. Shows size of FUA (bubble size) and proportion living in city (shading)&nbsp;</b></p><p><img src="https://weasresicmspd.azurewebsites.net/images/default-source/articles/fua-map.png?sfvrsn=61ddc077_1" sf-size="100" /></p><p><i>Source: Eurostat. Latest available figures</i></p><p>While there are some similarities, their age profiles are strikingly different. </p><p>Younger people are more likely to live in the city &ndash; 2 million more aged 20-34 live here compared to respective commuter zones, attracted by the proximity to work and density of cultural amenities. But households during family formation years are likely to move into commuter belt zones, where there is often more space and lower affordability pressures. This are nearly 5 million more individuals aged 35-64, and over 3 million more dependents (0-19) living in the commuter belts. Retirees (65+) are more balanced, favouring the commuter zone by just 0.5%, equivalent to 1.7 million more people in the urban periphery. Reasons are likely to be complex and city-specific but may include the relative availability of social, transport and green infrastructure alongside their wealth and purchasing power. &nbsp;</p><p>While there are broad regional trends &ndash; the age profile spreads in Northern and Western Europe are more pronounced, while these are less prominent in Southern and Eastern Europe &ndash; each individual city predictably has its own patterns.&nbsp;</p><p><b>Figure 2: Spread between city and commuter belt populations, by age group (regional, FUAs of over 1m)</b></p><p><img src="https://weasresicmspd.azurewebsites.net/images/default-source/articles/age-profile-chart-3.png?sfvrsn=42a92dce_1" sf-size="100" /></p><p><i>Source: Eurostat. Latest available. Measures all individuals by age.&nbsp;</i></p><p>Based on this, it is unsurprising that the biggest biases towards young people living in the city proper are in Copenhagen (+19.6%), Toulouse (+15.2%) and Leipzig (+12.4%). Conversely, the largest discrepancies of retirement age populations living in the commuter zones are Porto (+9.8%), Lisbon (+8.3%) and Madrid (+6.5%). </p><p>However, this trend could be subject to moderate changes moving forward, as growing affordability pressures might push younger people further from the centre, while homeowners, as they age, are perhaps becoming more reticent to move from prime locations to commuter zones. Further, pensioners, who are Europe&rsquo;s cities fasting growing age group and often asset-rich, might begin to adjust their preferences to live in central locations, given their lower space requirements and often higher spending power. </p><p>This paints a complicated and potentially changing picture of how individuals interact with a city throughout their lifetimes, which will have knock-on effects on demand for appropriate homes. Understanding these specific dynamics of city-level demand, therefore, is significant for those involved with delivering Europe&rsquo;s new homes.&nbsp;</p></div>

Asymmetric demographics

Research analyst Tom Colthorpe explores how age profiles vary between cities and commuter belts, and what this means for Living real estate&nbsp;

Research analyst Tom Colthorpe explores how age profiles vary between cities and commuter belts, and what this means for Living real estate.

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<div><p paraid="247887223" paraeid="{08d83c6c-88d3-4c6f-85a8-ec41fdf288e0}{174}">I had the pleasure this week of visiting Brussels.&nbsp;</p></div><div><p paraid="1855263448" paraeid="{08d83c6c-88d3-4c6f-85a8-ec41fdf288e0}{180}"> &nbsp;</p></div><div><p paraid="1744889509" paraeid="{08d83c6c-88d3-4c6f-85a8-ec41fdf288e0}{186}">No - not for&nbsp;that&nbsp;reason. Instead, it was at the behest of the JLL Hospitality team for its annual Benelux hotels conference. A great example of JLL cross-sector collaboration, it was an opportunity to explore with clients and colleagues the literal space between our sectors.&nbsp;&nbsp;</p></div><div><p paraid="94192551" paraeid="{08d83c6c-88d3-4c6f-85a8-ec41fdf288e0}{196}"> &nbsp;</p></div><div><p paraid="2100890847" paraeid="{08d83c6c-88d3-4c6f-85a8-ec41fdf288e0}{202}">Whether it&rsquo;s the animation of ground floor space in multifamily blocks, more effective use of hotel lobbies, or soft-testing that cool new F&amp;B offer in a beta location, the traditional real estate sector lines are blurring.&nbsp;&nbsp;</p></div><div><p paraid="279949693" paraeid="{08d83c6c-88d3-4c6f-85a8-ec41fdf288e0}{208}"> &nbsp;</p></div><div><p paraid="1060683835" paraeid="{08d83c6c-88d3-4c6f-85a8-ec41fdf288e0}{214}">Most of us have had that soulless experience of a dead business hotel lobby in the middle of the day. Cue flex office space. What about that right space for afternoon casual meetings. Your choice can&rsquo;t obviously be a bar, or shouldn&rsquo;t obviously be a chain coffee shop, but absolutely must&nbsp;be a reflection of&nbsp;your impeccable taste? Cue that new&nbsp;coliving&nbsp;residence. Is it a hotel? Collaboration space? A niche gin bar? The best Ethiopian roast north of Addis Ababa? Someone&rsquo;s living room? All of those things? Who knows? Who cares?&nbsp;</p></div><div><p paraid="2134080930" paraeid="{08d83c6c-88d3-4c6f-85a8-ec41fdf288e0}{228}"> &nbsp;</p></div><div><p paraid="1969727171" paraeid="{08d83c6c-88d3-4c6f-85a8-ec41fdf288e0}{234}">The traditionalists among real estate professionals are sucking teeth and wondering about the fundamentals. How do I value that? What fund would it suit? Will it still be here tomorrow? Who knows how to operate it? Will it scale???&nbsp;&nbsp;</p></div><div><p paraid="611674847" paraeid="{08d83c6c-88d3-4c6f-85a8-ec41fdf288e0}{240}"> &nbsp;</p></div><div><p paraid="1200730975" paraeid="{08d83c6c-88d3-4c6f-85a8-ec41fdf288e0}{246}">There are also different breeds among you who can see the potential and are completely relaxed about the blurred lines. Moreover, they are already building strategies around space optimisation and monetisation that stretch well beyond the old property silos.&nbsp;</p></div><div><p paraid="1000017022" paraeid="{08d83c6c-88d3-4c6f-85a8-ec41fdf288e0}{252}"> &nbsp;</p></div><div><p paraid="1178276983" paraeid="{1bb44cb3-5b51-4531-8347-71b49e76bf72}{3}">Take a look at the Ace Hotel in Shoreditch, The Student Hotel in Amsterdam. Very different operating platforms, but a clear common thread - people. Lots of them.&nbsp;</p></div><div><p paraid="1670183203" paraeid="{1bb44cb3-5b51-4531-8347-71b49e76bf72}{9}"> &nbsp;</p></div><div><p paraid="842965181" paraeid="{1bb44cb3-5b51-4531-8347-71b49e76bf72}{15}">The animation of the space between sectors is about understanding people. What they want, what they don&rsquo;t want, can they afford it, is it interesting, can I get there. In a real estate world where the lines are dissolving, the basics remain the same.&nbsp;Give&lsquo;&nbsp;em&nbsp;what they want and you won&rsquo;t go far wrong.&nbsp;</p></div><div><p paraid="665399591" paraeid="{1bb44cb3-5b51-4531-8347-71b49e76bf72}{27}"> &nbsp;</p></div><div><p paraid="550464353" paraeid="{1bb44cb3-5b51-4531-8347-71b49e76bf72}{33}">So&nbsp;I come back to the JLL Hospitality conference. The fresh take, from the experts in understanding the customer, was revealing. In a high turnover&nbsp;hotels&nbsp;environment, the opportunity to try new concepts is much more comfortable than in multifamily. It is also more important, as higher traffic means faster obsolescence. Experiment, fail, learn, iterate.&nbsp;</p></div><div><p paraid="1347887944" paraeid="{1bb44cb3-5b51-4531-8347-71b49e76bf72}{45}"> &nbsp;</p></div><div><p paraid="972120087" paraeid="{1bb44cb3-5b51-4531-8347-71b49e76bf72}{51}">As we build our own blurred lines in JLL Living out of the former student, residential and elderly/ healthcare sectors, I&rsquo;m intrigued by the similarities and differences that are already reshaping our client advice. What is retirement living, if not the original&nbsp;coliving&nbsp;product? Can we improve the lives of elderly residents by ripping up the rules and creating more vibrant, more enjoyable spaces for the&nbsp;wider community to enjoy?&nbsp;Of course&nbsp;we can, alongside countless other ideas that are shaping our Living advice to clients.&nbsp;</p></div><div><p paraid="2080387459" paraeid="{1bb44cb3-5b51-4531-8347-71b49e76bf72}{67}"> &nbsp;</p></div><div><p paraid="779641512" paraeid="{1bb44cb3-5b51-4531-8347-71b49e76bf72}{73}">I learned quite a lot in Brussels by stretching across the divide to find some common ground. At least someone made progress there.&nbsp;&nbsp;</p></div>

Blurred Lines

Reflections of our Head of EMEA Living Research and Strategy, Adam Challis, on the Benelux hotels conference in Brussels

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<div><p paraid="268785707" paraeid="{c3d83e3f-2204-460a-b940-2bc175585bf6}{255}">While there are more units under construction than ever before (4,504), many of these will complete over the next 12 months, causing the pace of residential development to slow down. There is therefore a great opportunity for developers to take advantage
        of the supply shortfall in the years ahead.&nbsp;</p></div><div><p paraid="1571515515" paraeid="{3b2f43b2-fa20-4512-92c9-d9db73526a12}{6}">&nbsp;</p></div><div><p paraid="1275287639" paraeid="{3b2f43b2-fa20-4512-92c9-d9db73526a12}{10}">The lettings market in the City &amp; City Fringe market has been very strong for the past three years. Meanwhile, the existing property sales market is set to become far more active and competitive over the next ten years.&nbsp;Overall, we expect
        price and rental growth to outpace the Central London average over the next five years.&nbsp;&nbsp;</p></div><div><p paraid="48969615" paraeid="{3b2f43b2-fa20-4512-92c9-d9db73526a12}{20}">&nbsp;</p></div><div><p paraid="1388697666" paraeid="{3b2f43b2-fa20-4512-92c9-d9db73526a12}{24}">Want the full picture? Download the report now:&nbsp;&nbsp;</p><div style="margin:15px;"><a href="https://res.cloudinary.com/jll-global-olm-np/image/upload/v1574461780/resi/gb/cms/Research/PDFs/JLl_City_CityFringe_2019.pdf" target="_blank"><button class="Button primary">Download Report</button></a>
</div></div>

City & City Fringe- October 2019

The City &amp; City Fringe residential market is about to enter a quieter phase in its&nbsp;transformation.&nbsp;&nbsp;

<div><p paraid="1644987067" paraeid="{c3d83e3f-2204-460a-b940-2bc175585bf6}{229}">The City &amp; City Fringe residential market is about to enter a quieter phase in its transformation.</p></div>

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<div><p paraid="832016025" paraeid="{be9c1893-fb8e-4eab-95b7-48e7588f40d3}{178}">The City of Berlin recently opted to uphold a summertime proposal from the municipal Government to cap rent increases in the most visible sign of new rent controls in Europe. The reaction is understandable, with average rents in Berlin up 107% since 2009. With 14% home ownership this proposal is also a strong play to the electorate, showing that politicians are prepared to act against unaffordable homes in Europe&rsquo;s cities under population pressure.&nbsp;</p></div><div><p paraid="507922258" paraeid="{be9c1893-fb8e-4eab-95b7-48e7588f40d3}{184}"> &nbsp;</p></div><div><p paraid="153800720" paraeid="{be9c1893-fb8e-4eab-95b7-48e7588f40d3}{190}">But, with all biases declared, this is bad policy.&nbsp;&nbsp;</p></div><div><p paraid="1249680621" paraeid="{be9c1893-fb8e-4eab-95b7-48e7588f40d3}{196}"> &nbsp;</p></div><div><p paraid="698155749" paraeid="{be9c1893-fb8e-4eab-95b7-48e7588f40d3}{202}">There is a long history of political tinkering with housing markets. Housing costs are also a truly unifying issue, with cities across the developing and developed world trying to manage unmanageable house price and rent rises. Urbanisation is ubiquitous, but so too is the intractable challenge of a meaningful housing supply response to keep costs in check. Where solutions are in action, they take a long time and even more political capital against often voracious anti-development opposition.&nbsp;&nbsp;</p></div><div><p paraid="126147077" paraeid="{be9c1893-fb8e-4eab-95b7-48e7588f40d3}{208}"> &nbsp;</p></div><div><p paraid="246196376" paraeid="{be9c1893-fb8e-4eab-95b7-48e7588f40d3}{214}">So, local politicians see regulation as the easy out. In so doing, they contribute to even&nbsp;greater problems.&nbsp;&nbsp;</p></div><div><p paraid="281836091" paraeid="{be9c1893-fb8e-4eab-95b7-48e7588f40d3}{223}"> &nbsp;</p></div><div><p paraid="259647220" paraeid="{be9c1893-fb8e-4eab-95b7-48e7588f40d3}{229}">Landlords, faced with no room to grow revenue, respond by slashing costs. Property management suffers, capital expenditure is pared back, and voila - a literal second class tenure emerges. As conditions deteriorate the pressures for renters to buy can incentivise landlords to sell up all together, exacerbating problems of availability in rental stock.&nbsp;</p></div><div><p paraid="1386075900" paraeid="{be9c1893-fb8e-4eab-95b7-48e7588f40d3}{235}"> &nbsp;</p></div><div><p paraid="206402091" paraeid="{be9c1893-fb8e-4eab-95b7-48e7588f40d3}{241}">At the same time, investors are now less likely to buy or build new stock, so improvements to housing quality are biased towards owner-occupation. Even in Berlin, where properties built after 2013 are exempt, the fear of &rsquo;mission creep&rsquo; is enough to put investors off. There is a weight of empirical and academic research that shows these impacts are the inevitable market response. It&rsquo;s a lose/ lose outcome.&nbsp;&nbsp;</p></div><div><p paraid="304189267" paraeid="{be9c1893-fb8e-4eab-95b7-48e7588f40d3}{247}"> &nbsp;</p></div><div><p paraid="746857310" paraeid="{be9c1893-fb8e-4eab-95b7-48e7588f40d3}{253}">Municipalities need to understand that the market is broadly rational and is able to re-weight capital towards more favourable locations or sectors. Residential investment is not a closed loop anymore - roughly 30% of investment in 2018 was cross-border. Unless the state is inclined to bring all rental housing on balance sheet, it will go elsewhere. Working alongside private landlords is a far more productive use of policy.&nbsp;</p></div><div><p paraid="1682807340" paraeid="{1a4698d0-7cab-4386-bc99-8ee63b70d2b8}{4}"> &nbsp;</p></div><div><p paraid="270565299" paraeid="{1a4698d0-7cab-4386-bc99-8ee63b70d2b8}{10}">As Andrew Allen, Global Head of Investment Research (Real Estate) for Aberdeen Standard Investments notes, rent controls per se aren&rsquo;t the problem. As a manager of in excess of &pound;7bn of direct residential investments, the ASI perspective is that any control has to be set fairly for both resident and investor, with long term stability at its core. Controls that are ultimately unstable or uneconomic will simply push long term capital sources away from residential investments. There is much evidence and interest from huge flows of capital prepared to develop and modernise the badly needed stock of European housing. It could be an extraordinary own goal - for which nobody benefits - to undermine this opportunity to help solve Europe&rsquo;s housing crisis with the investment ambitions from long-term institutional investors.&nbsp;</p></div><div><p paraid="1238349623" paraeid="{1a4698d0-7cab-4386-bc99-8ee63b70d2b8}{16}"> &nbsp;</p></div><div><p paraid="1085576158" paraeid="{1a4698d0-7cab-4386-bc99-8ee63b70d2b8}{22}">With Berlin, we are at an inflection point. It is perhaps more socialist than most European cities, with the new regulations borne out of a former East German party. But, it may also be a harbinger of wider change; Paris, Madrid, Amsterdam and London have all made softer moves or noises to legislate rental markets.&nbsp;&nbsp;</p></div><div><p paraid="1788449318" paraeid="{1a4698d0-7cab-4386-bc99-8ee63b70d2b8}{28}"> &nbsp;</p></div><div><p paraid="545826874" paraeid="{1a4698d0-7cab-4386-bc99-8ee63b70d2b8}{34}">The message to policy makers is clear - don&rsquo;t be fooled by the easy option. At least, don&rsquo;t make these policy changes without a clear understanding of the local market response. For investors, the message is more nuanced. Residential investment remains highly attractive, but current pricing may not fully reflect policy risk. Take note.&nbsp;</p></div>

The Rights and Wrongs of Regulation

neighborhood-watch-paddington-900-600

Head of EMEA Living Research and Strategy, Adam Challis comments on&nbsp;the most visible sign of new rent controls in Europe.

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<p>The preference for new and modern properties and the lack of current stock of this type will mean that price growth and investment returns, covering all property types in Prime Central London, are likely to be dampened in the medium-term. The Prime Central London lettings market experienced a very active Q3, boosted by the sheer number of HNW students renting higher value properties- however their desire for new-build property is clear.</p><p>Aside from the need for the modernisation of properties, the short-term outlook in both the Prime Central London sales and lettings markets will be impacted by the ongoing Brexit uncertainty. If a deal with the EU is secured, however, we expect both price growth and rental growth to rebound quite quickly. At the most fundamental level there continues to be a lack of transactions and a scarcity of properties to buy, especially of good quality. </p><p>Want the full picture? Download our latest report: </p><button class="Button primary"><a style="color:#ffffff;" href="https://res.cloudinary.com/jll-global-olm-np/image/upload/v1578925610/resi/gb/cms/Research/PDFs/JLL_PCL_Q3_2019.pdf">Download the report </a></button>

Prime Central London

Modernisation must not be compromised in the Prime Central London market as buyers and renters demonstrate preference for renovated and new build stock  

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<p>I want to highlight an opportunity.</p><p>&nbsp;</p><p>It could be the greatest land conversion opportunity of the 21<sup>st</sup> Century. This is an opportunity that can serve a huge economic, social and environmental benefit. This is an opportunity that can fundamentally transform the lives of the 4 billion people who live in the world&rsquo;s cities.</p><p>&nbsp;</p><p>This opportunity involves the re-provision of land physically occupied by the world&rsquo;s 1 billion-plus individually owned or leased cars. To understand this opportunity in greater detail, JLL analysed 10 major European cities to assess how much land is given over to cars.</p><p>&nbsp;</p><p>Our findings show that privately operated cars are currently parked on an area totalling 21,000 hectares across the 10 major cities &ndash; an area equivalent to 538 Canary Wharfs or 148 Hyde Parks.</p><p>Based on average residential values in each of the ten cities, this land carries a value of circa &pound;1 trillion.</p><p>&nbsp;</p><p>Furthermore, the road networks for these cars totals 99,500km &ndash; enough road to travel two and half times around the world.</p><p>&nbsp;</p><p>And yet this land is used hugely inefficiently. In fact, a privately-operated car is only used 4% of its average 15-year lifespan, according to research from Morgan Stanley. The rest of its life it is parked.</p><p>But things could be about to change.</p><p>&nbsp;</p><p>Climate emergency is forcing city planners to look at ways to reduce carbon emissions and improve air quality &ndash; and one of their focuses is on reducing car usage in urban areas. Meanwhile, rapid technological advances are paving the way for electrified automated robo-taxis to become a commonplace feature of a city&rsquo;s public transport system.</p><p>&nbsp;</p><p>The OECD modelled the potential use of an Uber-style public transport system in Lisbon and found that it could reduce the number of cars on the road by 90%. Using a new democratised public transport system &ndash; in which anyone and everyone could hail a bus or taxi to near their house &ndash; the reduced number of vehicles that would be on the road could be used far more intensively than the current system of individual private operation. And it is this changed model that brings about the great land conversion opportunity &ndash; an opportunity that should be viewed through an economic, social and environmental lens.</p><p>&nbsp;</p><p>Larger areas given over to parking could be used for commercial or economic benefit. Previous JLL research found there are circa 10,000 urban car parks in the UK which could be used to build 400,000 new homes. Private garages could also be used for easy conversion to thousands of new habitable rooms.</p><p>&nbsp;</p><p>From a socially beneficial perspective, new larger and safer cycle lanes could be introduced along roadsides where cars are currently normally parked. Widespread pedestrianisation could also occur on smaller connecting roads between blocks. Barcelona&rsquo;s city authority is currently experimenting with this idea through the creation of &lsquo;superblocks&rsquo;.</p><p>&nbsp;</p><p>And finally, great environmental benefit could occur through the mass &lsquo;greening&rsquo; of driveways or the creation of new linear parks on former roads. Of course, it isn&rsquo;t going to be a completely smooth road towards achieving this utopian position. Alternatives to privately operated driving need to increase quickly and the infrastructure required to allow these methods to work will significantly need to improve.</p><p>&nbsp;</p><p>But this is an opportunity to fundamentally change the urban landscape. And given the size of the prize economically, socially and environmentally, it is one we cannot afford to miss.</p>

Driving Change

Nick Whitten, Research Director, explores the residential opportunities of converting land in cities currently occupied by cars.

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<div><p paraid="483423742" paraeid="{db434a29-7b73-48f9-a8ba-0af5a525583b}{183}">Europe&rsquo;s cities are&nbsp;predicted to&nbsp;grow&nbsp;by&nbsp;just under&nbsp;100,000 people per month&nbsp;over the next decade&nbsp;&ndash; but&nbsp;none&nbsp;are adapting quickly enough to this significant influx of demand.&nbsp;This is putting pressure on the delivery of all types of homes across Europe&rsquo;s major urban centres. From student housing near universities, rental products aimed at those across the age spectrum, to senior living homes for the continent&rsquo;s fastest growing demographic, demand is not only growing, but changing as well.&nbsp;&nbsp;</p></div><div><p paraid="72050028" paraeid="{db434a29-7b73-48f9-a8ba-0af5a525583b}{211}">JLL&rsquo;s new&nbsp;<a href="https://www.jll.co.uk/en/trends-and-insights/research/jll-european-city-dynamics-report-2019" target="_blank" rel="noreferrer">European City Dynamics</a>&nbsp;research paper looks at the key demand-side drivers for Living across the continent&nbsp;and&nbsp;is part of a wider series of outputs by JLL Research to understand Europe&rsquo;s changing Living markets.&nbsp;&nbsp;</p></div><div><p paraid="1535021833" paraeid="{db434a29-7b73-48f9-a8ba-0af5a525583b}{224}">A consequence of this demand is strong urbanisation, with the&nbsp;proportion of&nbsp;urbanites&nbsp;expected to&nbsp;rise&nbsp;from&nbsp;74.5%&nbsp;in 2019 to&nbsp;76%&nbsp;by 2029 - the equivalent of&nbsp;11.6&nbsp;million people.&nbsp;This is caused by both strong&nbsp;city-level&nbsp;population growth alongside&nbsp;stagnant,&nbsp;and sometimes declining,&nbsp;rural populations.&nbsp;&nbsp;</p></div><div><p paraid="568041461" paraeid="{2eada9a5-c1c5-4171-89ec-9c3254ade7e5}{21}">Cities&nbsp;are growing because of inward migration &ndash; from both the rest of the country and abroad &ndash; and natural increase&nbsp;(births outweighing deaths). Individuals moving to cities are generally young, often university graduates,&nbsp;and&nbsp;include&nbsp;those from abroad.&nbsp;Urban areas&nbsp;are projected to remain youthful&nbsp;in comparison to&nbsp;ageing countries&nbsp;&ndash; 33% will be under 30 in 2030.&nbsp;However, the fastest growing demographic in European cities is the 65+&nbsp;cohort. There will be over 5 million more retirement-aged individuals in the continent&rsquo;s major urban hubs in the next decade.&nbsp;&nbsp;</p></div><div><p paraid="26487747" paraeid="{2eada9a5-c1c5-4171-89ec-9c3254ade7e5}{61}">Growing demand for different urban homes is not, however, being met by sufficient supply, which can generate&nbsp;a range of problems.&nbsp;Perhaps most importantly,&nbsp;house&nbsp;prices&nbsp;are&nbsp;increasing much faster than incomes, creating affordability&nbsp;issues. Private renting is,&nbsp;as a consequence,&nbsp;necessarily&nbsp;becoming more popular across Europe&rsquo;s cities,&nbsp;but&nbsp;it is&nbsp;also becoming a tenure of choice. The most&nbsp;sought-after&nbsp;neighbourhoods &ndash; often central and well-connected &ndash;&nbsp;show the highest rents, while popular, cheaper neighbourhoods have seen fast rises&nbsp;in recent years.&nbsp;&nbsp;</p></div><div><p paraid="744455253" paraeid="{2eada9a5-c1c5-4171-89ec-9c3254ade7e5}{123}">Demand&nbsp;for housing&nbsp;at different life stages is not&nbsp;evenly distributed across a city and its wider metropolitan area.&nbsp;The spatiality of demand varies between each city, but some broad trends can be observed. Students and young people largely want well-located and well-connected homes, both close to campuses&nbsp;and&nbsp;in areas with a vibrant social life. Families generally prefer to live where living and outdoor space is more affordable, where they could have access to open spaces and with good schools nearby. Retirees are more inclined to live in commuter zones and suburbs.&nbsp;&nbsp;</p></div><div><p paraid="1714523638" paraeid="{2eada9a5-c1c5-4171-89ec-9c3254ade7e5}{143}"><a href="https://www.jll.co.uk/en/campaign/living" target="_blank" rel="noreferrer">Living</a>&nbsp;is a unique real estate asset class, with a wide range of market participants, that includes legislators, planners, developers, investors and operators.&nbsp;&nbsp;</p></div><div><p paraid="371199448" paraeid="{2eada9a5-c1c5-4171-89ec-9c3254ade7e5}{150}">For Europe&rsquo;s cities of the future to be successful,&nbsp;we&nbsp;must recognise individual city-specific characteristics and work alongside each other to provide quality housing solutions for current and future generations of Europeans.&nbsp;</p></div>

Demand drivers for Living (urbanisation)

Strong urbanisation is putting significant pressure on housing delivery across Europe&rsquo;s major centres

&nbsp;Strong urbanisation is putting significant pressure on housing delivery across Europe&rsquo;s major centres

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