Last Updated on 2023-04-11 by admin
Co-living often entails high-end, purpose-built rental housing with studio bedroom apartments and lots of shared amenities like gyms, co-working areas, resident lounges, and movies. As investors, developers, and operators look to diversify away from traditional real estate assets and into the “Living” sectors, there is a rising pipeline of co-living properties around the UK. A number of reasons, such as a persistent housing shortage, a rising population, urbanisation, reducing household sizes, and shifting consumer attitudes, support the investment case for co-living.
Expert estate agents for Brackley and other property professionals has seen a rising trend of young professionals just starting their careers and new graduates find co-living to be particularly enticing. People are drawn to accommodations that are well-managed and frequently situated close to urban amenities and career prospects. Co-living offers residents the conveniences and sense of community they want at a reasonable price. For individuals who are already accustomed with the communal component of purpose-built student housing, this is especially enticing (PBSA).
For those who are unable to buy a home or who prefer the freedom of renting, co-living offers a wider range of options. Many people, especially younger people looking to live in urban regions close to their jobs and amenities, are finding it increasingly difficult to afford a home due to rising housing prices relative to average salaries.
Record-high first-time buyer deposits suggest that only those who are lucky enough to receive financial assistance from the “Bank of Mom and Dad” have a chance to become homeowners. As a result, the private rental sector (PRS) has expanded; there are now approximately 2 million more households in the UK renting privately in 2019 than there were in 2011, an increase of 50% from 3.9 million to 5.9 million. Almost 300,000 more PRS homes are now located in London alone, bringing the total to 1.1 million.
The recent rise in property costs over the past 18 months has made it even harder for first-time purchasers to become homeowners, despite the fact that this has been a growing trend, making co-living a more alluring alternative.
There is a misperception that co-living arrangements have rental rates that are much higher than those in the larger residential market and are therefore exclusively available to people with better incomes. Co-living rents are actually intended to be about 20% less than the overall cost of living in other Private Rented Sector (PRS) housing. This discount is approximative and subject to change based on amenities and other elements like room size.
Co-living is a desirable alternative for many renters due to the presence of high-quality amenities within the building and the ease of making a single, all-inclusive monthly rental payment, which offset the smaller bedrooms. Local governments are preparing measures to support co-living.
More and more municipal authorities realise the benefits of co-living and planning to make accommodations for it as it becomes more popular among tenants and the investing community. The “large-scale purpose-built shared living” (LSPDSL) rules in the 2021 London Plan provide a general outline of the requirements for such developments. These requirements, among others, provide for schemes to be managed by a single person, have a minimum scheme size of about 50 units, and contribute to affordable off-site housing.
The Greater London Authority (GLA) has more recently released co-living-related recommendations that will play a crucial role in the London Plan. With requirements for elements like amenities and common areas, as well as minimum and maximum room space standards of 18 sqm and 27 sqm, respectively, this guidance is more detailed.
Outside of the capital, several local governments have put in place planning regulations that make it difficult for co-living buildings to be financially viable. For instance, a draught planning document for Birmingham calls for a minimum room size of 27.5 square metres, and Liverpool’s city council recently passed a planning advice note requiring co-living projects to meet minimum space requirements of 37 square metres, which are set nationwide.
Regional towns are increasingly catching up, even if London has been a pioneer in the co-living arena. Because to the great demand for reasonably priced rental housing, co-living originally became popular in London, much like the Built to Rent (BtR) and Multifamily markets. Nonetheless, 60% of the units submitted for planning in the last three years were outside of London, showing that regional cities had caught up.
Hence, co-living has become a practical substitute for those who are unable to afford to buy or rent larger dwellings. Co-living has grown in popularity in major UK cities, with London leading the way, due to rising demand from young professionals and graduates seeking flexible housing options. Regional cities are catching up, though, as more local governments plan for co-living projects. Co-living keeps gaining popularity among developers, investors, and tenants alike despite occasional difficulties from local authorities with planning guidance. Co-living is probably going to continue to play a significant role in the UK’s rental market, given the country’s persistent housing shortage and the rising desire for inexpensive and high-quality renting options.