Matthew Cleave, director of structured finance at Arc & Co, said that while we had seen a softening in house prices and the continued provision of Help to Buy, the purchase of a property was still out of reach for many young professionals, particularly in the larger cities across the UK.
“With wages remaining fairly stagnant and rents for an apartment also remaining unaffordable for many young professionals, the co-living model provides both a viable and attractive option.
“Co-living is changing the previously negative reputation of the HMO industry and providing a more modern alternative fit for purpose in meeting the needs of young professionals at an affordable cost.”
Steffan Goold, director at Beaufort Capital, said that the growth of the co-living sector looked set to continue in 2019, with a number of new entrants to the market over the past year and many more businesses exploring the sector.
“The current trend for millennials is that they seek experiences rather than possessions and have an appetite for more sociable lifestyles than previous generations.
“One reason behind this may be [a] result of young people accepting that they can’t get a foot on the housing ladder and instead are exploring other ways of living – such as co-living – rather than saving for their first home.
“Co-living is a great solution for those moving to a new city while they figure out where they would like to live.”
Daniel Beck, CEO at Coliving.com, claimed that co-living was making the lives of young adults and seniors much better.
“We will also see other demographics look into it.”
Barry Glantz, managing director at co-living developer the Studios24, said that there was a clear indication that co-living schemes had become more popular recently and it expected to see a marked increase in the number of such schemes in the UK.
“With the evidence of our own scheme in Wolverhampton – the Studios24 – we have found that residents are looking for an all-inclusive cost for their own space, but with the benefit of communal facilities that they would otherwise not be able to afford.
“Any densely populated city or region could support co-living.
“However, I see cities such as Coventry, Leicester and Walsall as prime hotspots due to [the] high demand for affordable homes for the young and a lack of supply.”
Gareth Belsham, national head of building surveying at Naismiths, said that the rise of co-living developments was best seen as a side effect of Britain’s chronic housing shortage rather than a panacea.
- Beaufort Capital Breakfast Seminar 2018 - Panel Q&A
- Assetz Capital supports co-living developer with £4.5m facility
- Co-living 'definitely has its space in the millennial marketplace'
“Their popularity is likely to grow further, especially in places like London, where young people have fewer and fewer affordable rental options.
“Even though resi development is holding up well in the face of Brexit uncertainty, co-living projects offer decent margins and thus an attractive proposition for builders.”
Guy Horne, co-founder of HS Property Group, added: “I expect that there will be a rise in co-living developments in 2019 as people – particularly millennials – continue to blur the lines between work, home and play.
“These shared living spaces offering in-house amenities – such as gyms, bars and meeting rooms – allow occupants to save time and money while being able to socialise and work.
“A unique selling point of co-living is the sense of community that it creates, with schemes explicitly designed to encourage greater social interaction.”
Natalie Jones, business analyst at Bridge Invest, highlighted that co-living had become more popular amid current challenges in affordable housing and a shift towards an ‘experience economy’.
“Co-living offers occupiers a sense of community, and a solution to social isolation.
“The convenience and amenities akin to purpose-built student accommodation is particularly suitable for graduates who relocate to large cities for work.
“As a recent graduate, I am a witness to the changing attitudes towards home ownership in the UK.
“Undeniably, younger people are starting to accept renting as a long-term living solution.
“We are also seeing that people tend to settle down later and are open to flexible and convenience focused living arrangements.”
Chris Oatway, owner and director at LDNfinance, added: “With the steady increase in co-living popularity as a student accommodation solution, it is a natural progression for this simple and convenient living style to evolve to be a common occurrence, particularly among young professionals.
“Having shared living spaces coupled with their own private fully furnished apartment to retreat to, this lifestyle has also [attracted] older generation occupants looking to downsize and welcome the combination of community participation and privacy this living option offers.
“A result of this is the emergence of a new niche development market with the arrival of purpose-built developments – such as rental-only buildings – promising fully furnished apartments with rooftop gardens, gyms and 24/7 concierges.”
Matthew concluded: “The continued growth of co-living is likely to continue across the UK in larger cities where the cost of housing is disproportionate to wages and the rental demand from young professionals is strong.
“London will obviously prove to be a big market, but I would also expect an increase in cities such as Manchester, Bristol, Liverpool, Birmingham and Brighton.”