A new report, titled ‘The New Kid on The Block: BPF Co-living Report’, published by the BPF, has highlighted an increasing momentum for co-living amid calls for the government to formerly recognise the importance of the sector in the forthcoming revised NPPF.
The research, written by the BPF’s Co-Living Working Group, aims to improve the understanding of co-living and as such, consolidate the offer as an important, emerging asset class and a vital piece in the puzzle to solve the UK housing crisis. This is made even more timely by the renewed focus on housing ahead of the next UK General Election.
The demand for rental property in the UK now far exceeds supply, with data from rental room search platform SpareRoom showing that, as of September 2023, there is a shortfall of 11,716 rooms to rent in London alone.
Trends suggest this will increase and that it requires not only a step change in the delivery of new homes, but an increasingly diverse supply.
The BPF also found that co-living featured most prominently in London and other core cities, however, now there is a growing pipeline of developments across the UK.
Data from JLL in June 2023 shows that the UK has just over 31,000 co-living beds in operation and development.
Developers, operators, and investors are looking to diversify their rental residential offer to meet tenant demand, and the sector’s USP and appeal to renters means that it is a growing part of this offering. The report also highlighted the benefits of co-living.
Affordability and location are two key factors that affect the average urban renter today, with co-living providing the promise that it can deliver cost-effective, professionally managed homes in sought after locations.
This, alongside flexibility of lease length and a sense of community involvement renders co-living a highly attractive choice for prospective residents, the research shows.
“Much like Build to Rent, co-living can help make a significant contribution to the UK’s housing need and alleviate the current housing crisis. By catering to parts of the population which would otherwise struggle to find appropriate accommodation, co-Living is an accessible and affordable option for many, and should be recognised as such in policy going forward. Only through the continued diversification of the Living Sector is a critical tool in battling the housing crisis.”Mark Corea, Policy Officer, British Property Federation
In a bid to help the sector continually grow and progress, the BPF is calling for:
• The NPPF (National Planning Policy Framework) to provide active support for co-living schemes and require local authorities to include an allocation for co-living schemes in their local plans.
• Local authorities to include policies supporting co-living in their local plans.
• Policies to not be too prescriptive and in turn allow for market broad parameters within which to bring forward co-living developments.
• Affordable housing policies to recognise that co-living, in the same way as Build to Rent, meets a different housing need than traditional C3 housing need, and a reduced affordable housing offer should be required subject to a covenant that requires units to remain as co-living for a specified period failing which a clawback payment would be made.