Co-living is a new and exciting concept that’s gaining momentum in the property industry.  While the Build to Rent model has become a popular choice for institutional investors, co-living still has a way to go before it becomes mainstream. Developers and housebuilders are still hesitant to invest in co-living projects, and local authorities are yet to fully appreciate the benefits. In this blog post, we explore why co-living is an option worth considering and what needs to change to make it a more attractive proposition for all parties.

Co-living is based on the idea of shared accommodation.  Residents have their own private space (which includes a bed, living space with kitchenette, and bathroom) but also share communal areas from much larger shared / communal kitchens, living rooms, laundry, gyms, work space, cinema rooms, even private dining rooms, gaming rooms, garden and outdoor amenities, and depending on the operator, all-inclusive bills as well as room cleaning and laundry of bed linen. This approach is particularly popular with millennials and Generation Z (post university to early 40s), who value social interaction and community living over traditional notions of privacy. Set in highly accessible locations, close to transport hubs, such as The Rex, in Kingston which is adjacent to the mainline station in the heart of the town centre, co-living also offers a more affordable option for people who find it difficult to rent in expensive urban areas. However, for co-living to become mainstream, we need more developers and housebuilders to invest in it. Currently, many of them are still wary of the business model due to lack of understanding or fear of liability.

Another issue with co-living is the lack of awareness among the public. While co-living has been around for a few years now, many people are still unfamiliar with the concept. Some may even view it as a subpar option compared to traditional renting. Education and promotion are therefore crucial in changing this perception. Developers and local authorities need to work together to create awareness campaigns that showcase co-living’s benefits. They can hold open days for interested parties to visit co-living spaces, so they can see for themselves what they’re all about.

Co-living could also benefit from some standardisation and regulation. Currently, co-living spaces can vary greatly in terms of quality, amenities, and pricing. This lack of consistency makes it difficult for investors, tenants, and local authorities to compare and evaluate different co-living options. Standardisation could also ensure that co-living spaces meet certain safety and hygiene standards. This would increase the credibility and reliability of co-living as an alternative housing model, and alleviate any concerns regarding liability.

Local authorities are already working with developers to create more co-living friendly policies and regulations to encourage more investment in this area. The GLA is setting policy on room sizes and general standards for co-living accommodation, for example the amount of kitchen space per person / no. of washer / driers per person. In 2022 they consulted on ‘Large-scale Purpose-built Shared Living Guidance’, but we understand that they plan to revisit this. This could become the precursor for other councils to follow.

The planning system also needs to engage with co-living for it to become viable in the long term. Currently, co-living projects are often considered as a halfway point between HMO (house in multiple occupation) and Build to Rent models, which creates uncertainty as to how they should be regulated. By creating specific planning frameworks for co-living, local authorities could minimise ambiguity and encourage more investment. For example, they could allow for more flexible land use, incentivise co-living developers who provide affordable housing options, or fast-track planning permission for co-living spaces.

Co-living could also benefit councils by bringing in younger people into town centres, resulting in more inward spending and support for shops. On top of that, it could help release houses rented by many people and return these to family homes.

Co-living is an exciting and innovative approach to housing that could benefit both investors and tenants. While the concept is still fledgling, with more education and understanding, regulation, better standardisation in land use and planning, it has the potential to become a mainstream model for urban living, particularly in larger towns and cities. Developers, housebuilders, and local authorities should work together on creating a supportive environment towards co-living and identify the opportunities it offers by launching campaigns and promotional events to build trust and increase awareness among potential investors and residents. By uniting and moving forward with purpose, we can make co-living a valuable and beneficial part of the housing landscape.