London Swamped by Self Storage Units as Housing Shortage Grows

London’s self-storage sector is expanding at a record pace, raising serious questions about land allocation priorities in a city already grappling with a chronic housing deficit. According to property consultancy CBRE, the sector has nearly doubled in size over the past decade, with the total footprint of lock-up units across the capital now exceeding the area of Hyde Park.

Oliver Close, a senior director at CBRE, described the trajectory plainly: “It is a new sector in the last 25 years. It feels like enormous growth.” That growth is now quantified at 15.9 million square feet of self-storage space across London, up from 8.6 million square feet in 2015, with a further 45 facilities in the pipeline to complement the 239 already operational, according to data from Savills.

The consequences for residential development are drawing sharp criticism from within the housebuilding industry. Rob Perrins, chief executive of Berkeley, one of London’s largest private housebuilders, has identified Big Yellow Group, a leading self-storage operator, as his “biggest competitor” for land. His concern carries considerable weight when set against the broader data: the number of new homes sold by private construction companies in London plunged by 84 per cent between 2015 and 2025, according to property data firm Molior.

Mr Perrins made his position unambiguous in comments to The Telegraph: “The Government needs to prioritise housebuilding land and not allow Big Yellow to buy all the land, because London will have no new homes, fundamentally, if we carry on as we are.” His remarks reflect a growing tension between two competing demands on urban land, with self-storage operators holding structural advantages over residential developers in the planning system.

Self-storage developers are not subject to the same affordable housing obligations imposed on residential builders. Attic Self Storage, the operating arm of Rafter Group, which holds the distinction of being the fastest-growing private self-storage operator in Europe, outbid residential developers on a number of sites in 2024, in part because it was not bound by the same planning requirements. This regulatory asymmetry is increasingly cited as a material factor distorting competition for developable land.

The investment backdrop is amplifying this dynamic. Mr Close noted that private equity, pension funds, and sovereign wealth funds are all actively backing self-storage expansion, characterising the environment as “a scramble to try and expand their portfolios.” The sector’s income stability and operational simplicity make it an attractive asset class for institutional capital, intensifying competition with residential developers who face higher costs, longer build programmes, and greater planning risk.

The demand side of the equation is equally compelling for operators. Simon Loveridge, chief executive of Rafter Group, described lifestyle-driven household usage as “probably the fastest-growing cohort,” reporting a 20 per cent increase over just two years. He attributed this in part to London’s housing shortage itself, which is compelling residents living in smaller properties to store excess belongings off-site. The demographic profile of users is also shifting, with Mr Loveridge noting that the average age of storage customers is declining.

Structural changes in working and commercial patterns are providing additional demand tailwinds. The pandemic-era shift to home working prompted households to reconfigure domestic space, creating new demand for off-site storage. The concurrent rise of small-scale e-commerce operators has generated commercial demand, as online sellers seek affordable space to hold inventory without committing to formal warehouse leases. Rafter Group opened four London units in 2025 and has three more in its development pipeline for the current year.

Savills forecasts that the sector could double again in size within a decade, while projections indicate that storage space per capita in London will rise from 0.12 square metres to 0.15 square metres over the next three years, approaching nearly twice the current UK average of 0.08 square metres. Ollie Saunders, head of self-storage at Savills, stated the trajectory plainly: “We could definitely see the size of the industry doubling probably in the next 10 years.”

Against this backdrop, the policy response has been modest. Housing Secretary Steve Reed and London Mayor Sir Sadiq Khan launched an emergency package intended to stimulate housebuilding activity in the capital. One of the key measures reduced the mandatory affordable housing proportion in new London residential developments from 35 per cent to 20 per cent, with the aim of improving the viability of construction starts. Whether this adjustment is sufficient to restore the competitiveness of residential development relative to self-storage, given the structural advantages the latter enjoys, remains an open and consequential question for London’s built environment.