Boris bikes fuel rising prices in London rental market, says lettings agency

Research shows soaring demand - and rents - in previously unfashionable areas as bike hire puts tube stations within reach

by Simon_MacMichael   April 23, 2014  

Barclays Cycle Hire Scheme bikes on hire station © Simon MacMichael.jpg

A London lettings agency says that London’s Barclays Cycle Hire Scheme is transforming the residential rental market in areas previously viewed as off-limits by prospective tenants due to their distance from the tube and other public transport – and that streets that have a docking station are in particularly high demand.

According to Benham & Reeves Residential Lettings, in some places what would have been a half-hour walk to the nearest Underground station has been slashed to five minutes by Boris Bike, making such areas attractive to renters looking for cheaper places to rent.

That price differential may not last for long, however, with the firm’s research showing that while rental returns across the city as a whole have gone up five per cent since the scheme was launched in July 2010, “dramatic increases” have been seen in places that are at least a ten-minute walk from a London Underground or Overground station and that are served by the scheme.

It’s a phenomenon that the company says is happening across the capital where the scheme operates, and it gives examples of some of the rises, including in boroughs the scheme has come to more recently - Tower Hamlets and Hackney in 2012, and Hammersmith & Fulham last year.

Sand’s End in Fulham has seen rental returns grow by 25 per cent, followed by Walworth in South London at 22 per cent, Olympia in West London with 20 per cent, Haggerston in Hackney at 16 per cent, and Cubitt Town in East London, where growth has been 12 per cent.

The agency’s lettings director, Marc von Grundherr, said: “As the Barclays Cycle Hire scheme has expanded outside of central London and into areas that are a lengthy walk from the Tube, we have seen a dramatic increase in tenant enquiries for those areas.

“Tenants realise that they can simply ride a Boris Bike down to the station for little or no money at all and do not have to worry about whether their bike is secure.

“Tenants also tell us that while they would be unlikely to cycle all the way to work, either because their workplace is too far away or because they do not want to arrive sweaty and red faced, a leisurely cycle down to a nearby Tube station presents no problem.

“In light of our research, it’s a good reason for investors into London to thank Boris Johnson for setting this up – well done Boris!”

He told the Evening Standard’s Ross Lydall that the idea to conduct the research, which involved looking at details of some 200 properties, came to him after prospective tenants began asking for properties in streets with docking stations.

“Over the space of two or three months, I had a couple of tenants saying I don’t want to rent in that street, I want to rent in this street,” he explained.

“They said it’s because there is a bank of bikes next to the property. I started to think whether there was a correlation between the bikes going in and price increases.”

Nick Alworth, TfL’s general manager of the Barclays Cycle Hire Scheme, said: “We have always known that Barclays Cycle Hire would bring a range of benefits to London, so it’s nice to see some of these further confirmed by this latest research.

“Since the scheme opened in July 2010, the popular and now iconic bikes have helped change the way people make short journeys across London. More than eight million hires were carried out last year and we expect many millions more to be made during 2014.”

27 user comments

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UK city in Build-It-And-They-Will-Come Utility Cycling Shocker.

Tomorrow's exclusive: Removing human waste from beaches found to encourage swimming!

I was told there would be Cake. Luckily there's http://TestValleyCC.org.uk

KiwiMike's picture

posted by KiwiMike [497 posts]
23rd April 2014 - 9:34

31 Likes

“We have always known that Barclays Cycle Hire would bring a range of benefits to London, so it’s nice to see some of these further confirmed by this latest research.

This is not a benefit Mr Alworth.

posted by briano 55 [15 posts]
23rd April 2014 - 9:50

26 Likes

briano 55 wrote:

This is not a benefit Mr Alworth.

It's a benefit to those who are willing to pay up to 25% more in rent to use it, surely? If they can eschew car ownership, or save money/time on other forms of public transport?

I was told there would be Cake. Luckily there's http://TestValleyCC.org.uk

KiwiMike's picture

posted by KiwiMike [497 posts]
23rd April 2014 - 10:07

26 Likes

Not much of a benefit to those who are on a low wage. They will be forced to move when their tenancy agreement expires, move further away and pay more in fares.

The only winners appear to be the property owners.

posted by freespirit1 [171 posts]
23rd April 2014 - 10:15

23 Likes

freespirit1 wrote:
Not much of a benefit to those who are on a low wage. They will be forced to move when their tenancy agreement expires, move further away and pay more in fares.

The only winners appear to be the property owners.

...and the people choosing to pay more to take advantage of something that will deliver them a net benefit.

Yes, ideally the whole of London would have a bike hire station a few minutes from every door. Until that time some will value the proximity and vote with their wallets.

I really struggle to see your point - are you suggesting the the bikes should not be available? Or that landlords and tenants should not be able to agree a premium once bikes are nearby? London is healing itself from five decades of car-driven expansion. There are always going to be short-term losers.

I agree completely that the UK rental market is fundamentally broken, and that landlords should face capital gains taxes and a myriad other dis-incentives to commoditise basic human needs. But it's hardly the fault of a rental bike.

I was told there would be Cake. Luckily there's http://TestValleyCC.org.uk

KiwiMike's picture

posted by KiwiMike [497 posts]
23rd April 2014 - 10:33

20 Likes

KiwiMike wrote:
freespirit1 wrote:
Not much of a benefit to those who are on a low wage. They will be forced to move when their tenancy agreement expires, move further away and pay more in fares.

The only winners appear to be the property owners.

...and the people choosing to pay more to take advantage of something that will deliver them a net benefit.

Yes, ideally the whole of London would have a bike hire station a few minutes from every door. Until that time some will value the proximity and vote with their wallets.

I really struggle to see your point - are you suggesting the the bikes should not be available? Or that landlords and tenants should not be able to agree a premium once bikes are nearby? London is healing itself from five decades of car-driven expansion. There are always going to be short-term losers.

I agree completely that the UK rental market is fundamentally broken, and that landlords should face capital gains taxes and a myriad other dis-incentives to commoditise basic human needs. But it's hardly the fault of a rental bike.

London's rental market has seen an increase in costs. Some landlords are merely paying their bills, like everyone else. Not everyone is a Rachman.

OldRidgeback

posted by OldRidgeback [2205 posts]
23rd April 2014 - 11:21

22 Likes

“In light of our research, it’s a good reason for investors into London to thank Boris Johnson for setting this up – well done Boris!”

Wait, what? That seems a little revisionist to me.

posted by farrell [1457 posts]
23rd April 2014 - 11:36

16 Likes

briano 55 wrote:

This is not a benefit Mr Alworth.

Not necessarily a "benefit" (unless you are a landlord), but surely an important indicator.
We argue all the time that better cycling infrastructure will deliver benefits, but most of it is theoretical and easy for those to oppose it to raise doubts that they will deliver, or that they may be OK in Holland but not in the UK etc

So here we have a measurable metric. The proximity of a cycle hire docking station means that more people want to live in the area.
Just think of the effect if there were bikes AND a safe route to the station / place of work!

posted by RedfishUK [54 posts]
23rd April 2014 - 11:59

26 Likes

KiwiMike wrote:

I really struggle to see your point - are you suggesting the the bikes should not be available? Or that landlords and tenants should not be able to agree a premium once bikes are nearby? London is healing itself from five decades of car-driven expansion. There are always going to be short-term losers.

I agree completely that the UK rental market is fundamentally broken, and that landlords should face capital gains taxes and a myriad other dis-incentives to commoditise basic human needs. But it's hardly the fault of a rental bike.

I think the point is that given the excessive costs of renting in London already, it is not of benefit to the majority of people for a further 25% increase in costs in the 'cheaper' areas, meaning that those who can not afford the increase will have to move away from the areas = loss to those people. The ones who then stay, regardless of need or desire to use the bikes have to pay more = loss to those people. In general, when people have to pay more, for the same thing, that isn't a benefit to them. The people benefiting are the ones who are (largely) responsible for the cost of housing being so extortionate, i.e. the landlords who own the properties and the estate agents who earm money from the turnover and management of the properties (most charge a % of the rental value so the higher the rent the higher thier earnings). The commuters who choose to rent in the area on the basis that there is a boris bike gain a marginal benefit of slightly cheaper rent (but at a 25% increase v around 10% elsewhere that saving will rapidly deminish) but the others who live there because they have no choice (i.e. can't afford to live closer to a station etc) don't benefit.

posted by md6 [156 posts]
23rd April 2014 - 12:00

22 Likes

OldRidgeback wrote:

London's rental market has seen an increase in costs. Some landlords are merely paying their bills, like everyone else. Not everyone is a Rachman.

My rental property is earning me precisely nothing. I am actually subsidising my tenant on a monthly basis.

I will only see a pay-back if and when when I come to sell it.... but I can't afford to do that yet.

I wish the Boris Bikes covered the entire area inside the M25, and then we might see more people cycling all over the city.

posted by MrGear [85 posts]
23rd April 2014 - 12:27

12 Likes

RedfishUK wrote:

So here we have a measurable metric. The proximity of a cycle hire docking station means that more people want to live in the area.
Just think of the effect if there were bikes AND a safe route to the station / place of work!

Imagine the collective property barons of greater London barracking TfL / councils / RA's et al to build stuff that will net them more income.

Imagine the fabulously liveable city it would be. More expensive based on a rather crude metric, yes. But look at all the externalities London residents 'pay' for now...

I was told there would be Cake. Luckily there's http://TestValleyCC.org.uk

KiwiMike's picture

posted by KiwiMike [497 posts]
23rd April 2014 - 12:54

26 Likes

KiwiMike wrote:
RedfishUK wrote:

So here we have a measurable metric. The proximity of a cycle hire docking station means that more people want to live in the area.
Just think of the effect if there were bikes AND a safe route to the station / place of work!

Imagine the collective property barons of greater London barracking TfL / councils / RA's et al to build stuff that will net them more income.

Imagine the fabulously liveable city it would be. More expensive based on a rather crude metric, yes. But look at all the externalities London residents 'pay' for now...

I'm sure it will be really livable for the ever decreasing pool of people who are able to afford to live there. Lets take this further and just price everyone who isn't in the top 10% of earners out of london. Think how livable it would be with out 10% of its current population?
And in the meantime those lack of externalities will prevent children going hungry.

*Well i never thought that a cycling website would have me casting my mind back to undergrad economics

posted by md6 [156 posts]
23rd April 2014 - 13:07

9 Likes

Landlords - unlike owner-occupies - do face capital gains tax.

posted by Kadenz [43 posts]
23rd April 2014 - 13:11

12 Likes

MrGear wrote:
OldRidgeback wrote:

London's rental market has seen an increase in costs. Some landlords are merely paying their bills, like everyone else. Not everyone is a Rachman.

My rental property is earning me precisely nothing. I am actually subsidising my tenant on a monthly basis.

I will only see a pay-back if and when when I come to sell it.... but I can't afford to do that yet.

I wish the Boris Bikes covered the entire area inside the M25, and then we might see more people cycling all over the city.

What complete BS, your tenant is no doubt paying the majority of the mortgage on the property, but do they get the property at the end of the mortgage term, no, you do, you have earned the value of a property which is a lot different than 'nothing'.

posted by kie7077 [478 posts]
23rd April 2014 - 13:17

13 Likes

as an aside, can we stop calling them Barclays bikes,

http://road.cc/content/news/111595-barclays-bank-paid-nothing-toward-sou...

If the bank doesn't want to pay for Sponsorship why should they receive any publicity?

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posted by mrmo [1116 posts]
23rd April 2014 - 13:26

23 Likes

A number of commentators seem to object to areas getting better amenities, therefore more people wanting to live there to benefit from them, therefore increasing the pool of applicants for rental housing, therefore (in a free market with no form of price control) increasing the value the properties available can command.

If you really have a problem with this, you might be living in the wrong country.

Or century.

I'd suggest writing to your MP, not appearing to want a halt to the rollout of sustainable transport infrastructure. Rolling Eyes

I was told there would be Cake. Luckily there's http://TestValleyCC.org.uk

KiwiMike's picture

posted by KiwiMike [497 posts]
23rd April 2014 - 13:45

18 Likes

My tenant doesn't WANT to own a property in London, they are a foreign contractor, and the rent is paid by their employer.

Without private landlords providing this kind of economy, there would be problems.

I only ended up becoming a landlord because I needed to work abroad myself, and I decided to rent my property while I was away. When I came back to London, I couldn't move back into my own home any time soon due to my tenant's 3-year contract (which is now tracking below the normal rate for rent in the area).

So less of this "evil Landlords" bollocks, it's an important part of a flexible economy.

posted by MrGear [85 posts]
23rd April 2014 - 13:56

18 Likes

KiwiMike wrote:
A number of commentators seem to object to areas getting better amenities, therefore more people wanting to live there to benefit from them, therefore increasing the pool of applicants for rental housing, therefore (in a free market with no form of price control) increasing the value the properties available can command.

If you really have a problem with this, you might be living in the wrong country.

Or century.

I'd suggest writing to your MP, not appearing to want a halt to the rollout of sustainable transport infrastructure. Rolling Eyes

Exactly! If you want lower rent, why not write to your MP and demand public services are stopped, litter and burnt-out-cars are spread in the streets and unemployment be increased. Then you can live in your low-rent utopia.

posted by MrGear [85 posts]
23rd April 2014 - 13:59

22 Likes

Quote:
in some places what would have been a half-hour walk to the nearest Underground station has been slashed to five minutes by Boris Bike

Quote:
Tenants also tell us that while they would be unlikely to cycle all the way to work,. . . . , a leisurely cycle down to a nearby Tube station presents no problem.

Those walks to the station must have redefined 'leisurely'!

Cycling at six times walking pace is good going. especially on a Boris Bike.

posted by racyrich [128 posts]
23rd April 2014 - 14:14

10 Likes

racyrich wrote:

Those walks to the station must have redefined 'leisurely'!

Cycling at six times walking pace is good going. especially on a Boris Bike.

Might have been downhill? The beauty of a hire bike is you might make the trip back home uphill by bus.

I was told there would be Cake. Luckily there's http://TestValleyCC.org.uk

KiwiMike's picture

posted by KiwiMike [497 posts]
23rd April 2014 - 14:30

14 Likes

KiwiMike wrote:
A number of commentators seem to object to areas getting better amenities, therefore more people wanting to live there to benefit from them, therefore increasing the pool of applicants for rental housing, therefore (in a free market with no form of price control) increasing the value the properties available can command.

If you really have a problem with this, you might be living in the wrong country.

I think you are misunderstanding the point being made. People aren't against the infrustructure. They are against defining the resultant increase in price as a 'benefit' (at least that's my point)

posted by md6 [156 posts]
23rd April 2014 - 14:32

10 Likes

md6 wrote:

I think you are misunderstanding the point being made. People aren't against the infrustructure. They are against defining the resultant increase in price as a 'benefit' (at least that's my point)

The price increase itself isn't a benefit, obviously, and Mr Alworth from TfL never said it was. He appeared to be espousing the realisation of quick and cheap local transport options, welcomed by Londoners that are then prepared to spend more to ensure they have access to them. A significant number of people are willing to pay more owing to the benefit of having bikes nearby. Enough people value the bikes that it's skewing the overall market, therefore it must be a decent percentage. Otherwise once the one or two bike freaks had signed up the rest of the buyers would look elsewhere, eschewing the inflated rents. But there's enough demand to shift the whole market. That's my point Smile

I was told there would be Cake. Luckily there's http://TestValleyCC.org.uk

KiwiMike's picture

posted by KiwiMike [497 posts]
23rd April 2014 - 19:20

10 Likes

Me thinks Eric Pickles should weigh in on that one. He surely has the heft.

The entropy of the universe increases constantly. Carpe diem.

posted by noether [55 posts]
23rd April 2014 - 21:50

9 Likes

KiwiMike wrote:
briano 55 wrote:

This is not a benefit Mr Alworth.

It's a benefit to those who are willing to pay up to 25% more in rent to use it, surely? If they can eschew car ownership, or save money/time on other forms of public transport?

Bikes are a benefit to the tenant, but increase in prices is not a benefit of the bikes, or did I misread the original quote?

posted by briano 55 [15 posts]
23rd April 2014 - 22:38

8 Likes

briano 55 wrote:

Bikes are a benefit to the tenant, but increase in prices is not a benefit of the bikes, or did I misread the original quote?

Nick Alworth, TfL’s general manager of the Barclays Cycle Hire Scheme, said: “We have always known that Barclays Cycle Hire would bring a range of benefits to London, so it’s nice to see some of these further confirmed by this latest research.

“Since the scheme opened in July 2010, the popular and now iconic bikes have helped change the way people make short journeys across London. More than eight million hires were carried out last year and we expect many millions more to be made during 2014.”

The 'benefit' as I read and see it, is that the bikes "have helped change the way people make short journeys across London". Changed so much, for so many, that a significant number are prepared to pay not only the daily hire charge of £2, but also a monthly premium of a few dozen to maybe a few hundred pounds for proximity to a docking station. Figure no doubt dependent on rent, number of renters in a property etc.

Certainly if proximity to a docking station meant a Zone or two off your travel card, or ability to sell your own bike/not worry about it getting nicked, or - horror - sell a car, the increase in rental would be more than justified. Maybe it means a 10min spin through a park each morning & evening as opposed ot a slog on a High street or an armpit of a TfL bus. Priceless.

I was told there would be Cake. Luckily there's http://TestValleyCC.org.uk

KiwiMike's picture

posted by KiwiMike [497 posts]
23rd April 2014 - 22:54

6 Likes

KiwiMike wrote:

The 'benefit' as I read and see it, is that the bikes "have helped change the way people make short journeys across London". Changed so much, for so many, that a significant number are prepared to pay not only the daily hire charge of £2, but also a monthly premium of a few dozen to maybe a few hundred pounds for proximity to a docking station. Figure no doubt dependent on rent, number of renters in a property etc.

Certainly if proximity to a docking station meant a Zone or two off your travel card, or ability to sell your own bike/not worry about it getting nicked, or - horror - sell a car, the increase in rental would be more than justified. Maybe it means a 10min spin through a park each morning & evening as opposed ot a slog on a High street or an armpit of a TfL bus. Priceless.

I'd not describe it as a benefit to those who already live there that can't now afford the increased rents, but anyway...

I read the article and comments differently, given the context - an article about the increase in rent prices, then talking about a 'range of benefits' being further confirmed by research, when the research is that having the bikes nearby increases rents, led me to read it as 'increased rents are a benefit'. But I can see why you read it differently and agree that the bikes themselves being available can be a benefit to those that use them.

posted by md6 [156 posts]
24th April 2014 - 11:53

5 Likes

Rising rents in London are driven by increasing demand and insufficient new supply, not Boris bikes.

But it is possible that the relative attraction of some locations compared with others has been affected by the growth in cycling (including the availability of Boris Bikes) though.

posted by Kadenz [43 posts]
25th April 2014 - 21:49

2 Likes