Doug Edwards, Managing Director, VPS Property Guardians outlines the combined impact of rates and rents
There’s a drastic shortage in affordable living accommodation
Demand for office space is slowing down, with an increase in vacant office blocks
Convert an office so people can live there until the office space is needed
The current rates hike controversy is likely to increase attention on property guardians’ schemes as an alternative, albeit temporary, solution to finding affordable accommodation. I manage these schemes for the property solutions company, VPS Group, where in one current example of a vacant office block in central London, live-in guardians pay £550 a month, inclusive of bills, to live on the South Bank.
The double whammy on home seekers in the UK has been the slow growth in affordable accommodation together with the rise of the cost of rent or ownership. There are some 50,000 homeless households in England alone, and the soaring costs of rent, and the high five to six figure deposits required to buy a property, has impacted hugely on people seeking accommodation.
The anticipated rise in rates for hundreds of thousands of companies across the UK is quite likely to lead to a rise in vacant commercial space, whether that is an office block, a pub or a retail unit.
Empty properties can quickly attract the wrong attention, becoming a target for vandals, thieves and squatters. This is down to several factors, ranging from the perceived value of copper and other scrap metals within the property, to the need of somewhere warm and dry to take shelter.
Property guardians help to protect a property just by being occupied, but in addition it can also help mitigate empty property business rates. What is important though, is that such schemes are run efficiently and ethically, so that they are sustainable and meet the objectives of both the property owner and of the people living there.
Take the central London office block, for example. The extraordinary location of these prime offices on the South Bank, (formerly the headquarters of global events company, UBM), and the equally extraordinary business premises rates that it attracts, made it a great choice to adapt for use by property guardians.
But due to its size, location and value of the premises, it required a multi-option solution, rather than a ‘one size fits all’ fix. So we have live-in guardians staying there, combined with security technologies and also a concierge.
Over 50 guardians live there, for a £550 licence fee per month with all bills included, and the Tate Modern on their doorstep, and from where many can walk to their work. We installed kitchens, bathrooms and living room areas, and ensured all electrical and health and safety regulations were met. We also regularly inspect and maintain the site, and consequently the vast majority of our guardians have been there from day one back when the project began over a year ago.
An A & E nurse, a doctor, a West End actor, hairdressers, costume designers and photographers are amongst the guardians who live there.
A 24/7 security concierge service is present, and Smart Alarms with over a dozen sensors help protect the plant room equipment in the basement of the building.
Property owners deploying guardian schemes can often save by paying council tax instead of a significantly higher business rate. The guardians in the South Bank London office example, each pay £550 license fees, all inclusive. Market rent for a studio apartment in the same area is approximately £997 per month, before bills, or £1,176 with council tax and bills included. VPS contribute £10,000 a month towards utilities charges, and the income from the monthly license fee payments (approx. £25,000) are shared between VPS and the owners.
Property guardians schemes are not the answer to the housing shortage, but they do provide a temporary, effective, low-cost solution for some people seeking affordable accommodation. It’s not appropriate for families, and it must be managed properly and ethically, paying attention to multiple occupation regulations, and health and safety standards. Otherwise it will fail, and it won’t work. It’s partly unregulated, and so I, with other leading managers of similar schemes, are seeking to build a best practice model and set of standards for property guardians programmes in the UK.
An office-to-affordable accommodation case study can be found at www.vpsgroup.com.