Clients often ask if they should buy a car parking space with their new buy to let. A staight forward question but one which goes right to the heart of the future of transport in the UK's major cities.
If you are considering investing in a super-high-end penthouse, your prospective tenant may well need somewhere to keep the Porsche. The rest of this blog may not apply - there is a different dynamic in play.
However, the type of development that forms the backbone of our business comprises compact and mid-sized apartments in or close to regional city centres and regeneration areas. To answer the question about the viability of buying a car parking space, we need to consider the prospective tenants and their rapidly changing priorities.
Heriott Watt University conducted a study into the housing needs of degree educated millennials. They found that 91% aspire to live in city centres and that their most important criteria when choosing somewhere to live include being within walking distance to work and having high speed internet.
Both reflect the move away from the ownership model and the migration to paying for use. It is no longer about having rows of CDs and Blue-Rays on the shelves. Think on-demand services such as Spotify and Netflix. Even computer games are moving online. The same applies to car ownership. Instead of owning a depreciating asset spending the vast majority of it's time kerbside or in a car park, today's young city dwellers would rather minimise the need for transport in the first place, then pay for it on the occasions they need it. Love them or hate them, you have to acknowledge Uber's success in capturing this market.
The other big drivers here are, of course, climate change and health. Attitudes are hardening against polluting technologies, particularly amongst the young. It is not too fanciful to imagine a time when driving in a city centre will simply be socially unacceptable.
Cities such as Amsterdam started tackling this issue long ago. Prioritising people over cars with extensive cycleways, they have succeeded in achieving 70% of daily commutes being made by bicycle.
Our own Motor City - Birmingham - is proposing revolutionary changes to the city centre to reduce the use of cars. Originally decried as too radical, the plan seems to be building more acceptance.
The principle is to divide the city centre into zones, each physically separated from it's neighbours by pedestrian areas and cycleways. It will be possible to drive into a city centre zone, but not from one zone to another, making through traffic impossible. Cars will be forced out of the city centre and onto the ring roads. Even driving into a central zone will be discouraged by drastically reducing car parking availability, digging up existing car parks to be replaced by housing.
Other councils will no doubt be watching Birmingham and considering these and other ways to substantially reduce car use in their city centres.
The pay for use model, local authority intervention and the trend towards living close to work and leisure is likely to drive down the demand for city centre car ownership. However, there is the counter argument that there will always be people whose work and leisure means that they need their own transport. Scarcity could mean that apartments with allocated parking may benefit from a price premium.
Should you buy a parking space with your new buy to let? At a price of up to £25,000 in a regional city centre, it is a substantial investment. The final decision is, as it always was, a matter of personal preference.