The share market

The demand for flexible and affordable living space has created a new shared living concept: Co-living.

Co-living provides young professionals with an alternative way of renting shared accommodation. Typically, dwellings consist of large purpose-built accommodation, not dissimilar to student halls, where small private living spaces are combined with extensive communal facilities. Characteristically, this comprises a fully furnished ensuite room, with access to a communal kitchen, alongside other facilities such as gyms, spas, TV rooms and cinemas.

With rents ranging from between £1000-£3000 per month the target market is the more affluent consumer. However, with the breadth of facilities available to residents, alongside onsite maintenance, weekly cleaning and laundry services and the removed hassle of paying bills, the attraction is clear.

The concept originated in Scandinavia in the 1960s and has gained traction in the US but has only become prevalent in the UK over the last 5 years. The UK's first large scale co-living space is operated by The Collective and opened in London in 2016.  The majority of the UK's co-living supply remains consolidated in the capital, which accounts for 20% of the European market. Parallels with student accommodation, build-to-rent, hotels and co-working sectors - which have experienced exponential growth in the last 5-10 years - suggest co-living is only going to gain traction in the UK market.

Co-living is now recognised by the Greater London Authority as a form of accommodation in its draft London plan. Secondary cities, such as Manchester, Glasgow and Birmingham, now rank in the top 20 co-living cities in Europe.

The Collective is the most prominent UK provider. Since opening its first property in 2016, The Collective have opened 3 sites, including its Canary Wharf site in 2019, which with 700 units, is now the largest in the world. Whilst the earlier schemes were criticised for their impractical room sizes which inhibited their long term let positioning, Canary Wharf is more comparable to a hotel with the option of short terms lets for as little as one night.

Other disruptors in the sector include Fizzy Living (seen above), another big UK provider which operates seven blocks of flats across London, all of which are pet friendly. WeWork, the co-working forerunner, now operate WeLive; providing fully furnished apartments for flexible rental in New York and Washington DC. The biggest provider in Europe, the Medici Living Group, operate quarters in Germany, Poland and The Netherlands. This development is tech and community focused, with a propriety app, smart-living technologies and a regular events programme for residents.

We believe there are 5 USPs of the co-living model:

Sociability: providing the opportunity to socialise, network and engage with new people
Flexibility: the option of short and long term lets, which is key for the increasingly transient workforce and flexible working patterns of young professionals
Experience: the ability to attend events, classes and learn new skills
Convenience: fully managed properties, services and all-inclusive rent options
Affordability: relative to the quality and price of alternatives, with modern, fully furnished properties

There is no debate that the model is an innovative solution to the changing housing needs of young professionals and for the reasons above we believe co-living will become an established part of our communities.

Olivia Gannon