Gone are the days when clients could borrow enough dosh for a plot of land, a great design and the money to break ground
If the rise and fall of icon architecture has taught us anything, it’s that shifts in architectural taste are as much market-led as linked to fashion. When property developers were interested in flipping buildings for profit, the sparkle dust of starchitecture was the order of the day.
Since the recession, a new austerity in design has been mooted, said to emerge from a growing distaste for bankers’ fat wallets and luxe living. But what I found out at MIPIM last week was that a hunger for the White Collar Factory, and its long life and loose fit, is more likely being driven by the continued lack of liquidity in the market.
The banks still aren’t lending. Gone are the debt-funded days of development, when clients could borrow enough dosh for a plot of land, a great design and the money to break ground.
Nor can first-time buyers get a mortgage to buy off-plan (although the new mortgage indemnity scheme should at least help them borrow a bit more).
Over lunch, Martyn Evans, marketing and creative director of developer Cathedral, spoke of the challenges of kickstarting a project, admitting his feed funds are gleaned from friends, family and faithful investors. The initial concept sketch is key to securing the rest, but first he needs to rustle up enough money to bid on the land.
This new market paradigm is what’s driving Nick Johnson, Jonathan Falkingham and Tom Bloxham of Urban Splash into mass housing. ‘You don’t need the full funding in place to build houses, as we would with a scheme like Chips,’ Johnson said, referring to the Will Alsop-designed apartment block in Manchester’s New Islington (pictured). ‘For houses, you need the land, but then you can build in phases.’
You can build six houses, or even one house, sell them off, and then build some more – a model Countrywide Properties is following on a larger scale. Housebuilders can no longer construct hundreds of homes in a single phase – with the current funding gap, you’ve got to be selling as you build.
The type of investor buying into property is changing too – rather than looking for a fast turnaround, these buyers are talking about long-term, sustainable growth. There was talk at MIPIM of a return to the Great Estates model, where investors fund buildings that will stay popular with tenants for decades: high quality and low maintenance with built-in adaptability.
What does this mean for design? Fewer projects will be built, but of higher quality, and more of the kind of buildings we actually need, with an emphasis on making the end user happy. There will also be a continued focus on prime locations, such as London.
The eurozone crisis has been good for the capital – Italian buyers accounted for eight per cent of prime central London property in January and February, according to Knight Frank, overtaking Russians for the first time, while around three per cent of purchasers were Greek. The continued success of London will anger those who, like Johnson, see the capital profiting while the rest of Britain burns.
What I learned at MIPIM: forget iconitecture, clients want long lives and loose fits