Co-living, the sharing living spaces under flexible leasing arrangements, has made a remarkable comeback in the UK rental market. Savills reported a significant increase in co-living spaces in 2022, and the trend is expected to continue with 4,999 more spaces under construction in 2023.
This trend is gaining momentum with an increasing number of co-living spaces being introduced around the country to meet the changing demands of renters in a time of economic uncertainty. Read on to discover why co-living is rising in popularity, and whether it is a viable solution to a prolonged affordability crisis.
What is Co-Living?
Co-living represents a departure from traditional individual rentals, where groups of friends or strangers share communal spaces like kitchens and dining areas while also enjoying the privacy of individual rooms. It has become an attractive option for students, young professionals, and newcomers to urban centres, offering affordable living in expensive areas. Moreover, co-living fosters a sense of community, encouraging social connections and resource-sharing among tenants.
Why Co-Living?
This is by no means a new phenomenon, with shared boarding houses having been a staple of urban areas since the early 1900s, and student housing relying on a co-living setup ever since. However, as professionals cope with increased costs of living and soaring rents in the areas where jobs are most common, the lifestyle is gaining popularity with renters into their 30s, 40s and beyond.
London leads the co-living trend, reflecting the growing demand for living spaces in densely populated urban centres. Rental stock scarcity in London has led to rising rent prices, pushing renters towards more affordable and available co-living options.
Changing family dynamics and increasing costs of homeownership have also led to a rise in solo living arrangements. As adults are starting families later and later in life as a result of career-oriented lifestyles and unattainable living costs, the demand for family homes has diminished, making affordability and proximity to places of work renters’ top concerns.
The Covid-19 pandemic was a particular shake-up in peoples’ chosen living situations, highlighting the importance of community and social connections. Co-living provides opportunities for single renters and couples to create meaningful communities, especially as remote and hybrid work became more common.
A Sustainable Solution?
Co-living is reshaping the rental market, offering an affordable alternative to traditional rental models. With its benefits of affordability, community, and flexibility, it is likely to remain a prominent option in the future of UK rentals, catering to the evolving needs of tenants at a certain point in their lives.
However, when it comes to addressing the rental affordability crisis, in which rents have grown faster than average earnings for the past 21 months, developers and investors need to consider affordable solutions for couples and families as well as students and young professionals.
Find out more
We dive deeper into the topic of Co-Living in our Thought Leadership article “The Rental Revolution: The Rise Of Co-Living And Flexible Leasing“.
In this article, we take a more in-depth look at the HMO market, including aspects such as:
- What Flexible Leasing is
- Why Co-Living is gaining popularity
- What the benefits of Co-Living are for both landlords and tenants