Co-living is a type of housing that is managed by a professional third party in which tenants and renters share communal spaces to improve their quality of life. In simple words, co-living is a sort of rental housing which mainly comprises of smaller apartments or studios along with a number of communal areas such as gyms, co-working spaces, spas, communal lounges and cinemas. The co-living residential sector has become very popular in the UK in the past few years, with many investors, developers and builders looking to get into this sector.
Essentially, co-living has become popular due to the lack of affordable housing coupled with the increasing population, the high mortgage rates, the change in buyer demand as well as the number of homeowners and renters that are looking to downsize. At the moment, the demand for co-living spaces is very common among young professionals, new graduates and students. According to estate agents in Leeds, the reason this young demographic in the UK is attracted towards co-living is that these co-living spaces are usually close to the city centre. For instance, Leeds is a very popular city among students and young professionals because of its great universities and the number of employment opportunities. So, in July 2022 the city of Leeds decided to convert the city centre Headrow House into a co-living space with over 230 studio flats. The target audience for this co-living space was mainly 20-years-olds who are in university, fresh out of school or working professionals. Even in Manchester, another popular hub among students and young professionals, there are around £450 million worth of co-living schemes that are in the pipeline to accomodate the increase in local and international tenant demand in the city.
Also, the younger generation is able to find an affordable place that they can call home while having the luxury of communal spaces in their own building. This builds a sense of belongingness while allowing social interaction and ensuring security. In other words, co-living gives these young graduates and professionals a home, a sense of community and all the amenities that they require at a rather affordable price. Co-living also reduces loneliness, which was a common cause of depression and mental health issues especially during the Covid-19 pandemic, not only in the UK but all around the globe.
Could co-living become the future or property investments? Well, this is certainly a growing demand for co-living spaces in upcoming cities in the UK. For one, every individual is looking to increase their standard of living and improve their lifestyle, and co-living provides an opportunity for the same. Also, globally there is a phenomenon in upcoming urban cities and areas where we are seeing many homeowners choosing to downsize. The rate of inflation, the high cost of utility bills, the increasing price of property in the UK and the increased cost of living are also adding to this recent trend of downsizing. Co-living becomes a smart solution here homeowners and tenants have the ability to downsize while improving their lifestyle, which becomes a win-win situation.
And, as house prices continue to rise in the UK, many young professionals and 20-year-olds are choosing to opt for co-living spaces as opposed to paying thousands of pounds to live alone on rent. Let’s not forget that another reason co-living spaces are becoming popular among this generation is that these young professionals and students are enjoying the fact that they get to live near like-minded people as this provides a sense of belonging, and community all while increasing the quality of life.
A study by The European Commission in 2021 reported that 70 per cent of the entire world’s population will probably be living in 40 mega cities across the globe, including London, by 2030. If that is true, then it is fair to assume that co-living will become the only available solution to incorporate this sudden increase in population while ensuring that housing remains affordable. So it is safe to say that co-living is here, and it is here to stay. Many experts believe that co-living might become the future of real estate, and seeing how widely popular the concept of co-living has become in the UK, it is safe to say that they might be right.
