Co-living offers new model of city life

Sharing and caring; co-living offers a new model of city life, says Jonny Wooten, Marketing Director at Spike Global.

Münster POHA Space co-living. Source - Agata Pawlik, Ewa Maksymiuk - Spike | BTR News
Münster POHA Space co-living. Source - Agata Pawlik, Ewa Maksymiuk.

While students are busy packing their bags to head off to campuses, halls of residence and shared student houses, recent graduates and school leavers may be left scratching their heads and wondering where on earth they are going to live now.

By Jonny Wootten, Marketing Director, Spike Global

Summer holidays are over, the novelty of being back in the childhood bedroom has worn off, but the possibility of buying a home seems like a distant dream for most young Londoners and those moving to the capital for a first job or internship.

The unfortunate truth is that getting onto the property ladder is becoming near-to impossible, even for graduates with good entry-level jobs. The Halifax House Price Index noted, for instance, that while house prices in the UK leapt by 16% since the start of the pandemic in 2020, average income has only risen by 2.7% over the same period. And while mortgage companies limit borrowing to 4.5 times annual salary and expect a 5% to 10% deposit, the average house price to income ratio across the UK is 7%, and an eye-watering 9.7% in London, where the average home costs £534,970.

There is shared ownership, of course, but there are practical and emotional reasons, as well as financial ones, that stop young professionals deciding to buy straight away. For a start, only 65% of graduates manage to find a graduate-level job in their first year [ONS], while 46% of new graduates expect their first job to last less than two years [Cibyl Graduate Survey 2020] so they don’t want to miss out on career progression because of being tied to a particular location. Then there’s the simple desire to have fun while they’re young – with many opting to enjoy a carefree, mortgage-free extension of university life for a little longer.

So, what are the options? Shared houses can end up being more Bad Neighbours than Friends, and the affordable end of the private rental sector frequently comes with added rodents and mould. Modern Build to Rent can offer a high standard of living, with concierges, gyms and pools, but with premium prices to match.

The answer, according to many experts, is co-living – a growing sector of the rental market that is particularly appealing to recent graduates and young professionals. The premise of co-living – fairly small private rooms but with access to a large number of shared amenities and facilities, all set within a friendly, like-minded community – is successfully bridging the gap between student accommodation and the more expensive options of Build to Rent or a mortgage.

Set in the heart of cities, close to jobs and transport links, co-living is ideal for hybrid workers, with a quick commute and comfortable shared spaces to work in at home. And as the cost of living soars, there’s an added bonus. Unlike most private rentals, where it’s up to the tenant to sort out their utilities and broadband, co-living developments usually include all bills in a single fixed monthly rate, with rooms frequently available on a month-by-month basis rather than having to sign a contract for six months or a year.

Because co-living developments have been designed for the young professional market –79% are aged between 18 and 35 [Savills] – they offer a level of technology that you won’t see in the average damp London Victorian basement. From superfast broadband to resident engagement software such as Spike Living, everything is modern and user-friendly. Several co-living providers already make use of Spike Living, from early adopters of the industry, The Collective, to new entrants POHA House, based in Germany. Clients use Spike Living to not only manage bookings for shared facilities, but to address one of the biggest problems young people face in the city – loneliness.

Graduates and young professionals starting work may suddenly find themselves in a new city with none of the social network of university or school to fall back on – 73% of Generation Z young adults report sometimes or always feeling alone, according to a UCLA study. Co-living, designed with socialising and sharing at its heart, when combined with resident engagement software that facilitates people meeting and forming interest groups in the real world as well as virtually, might not only be the solution to our cities’ housing crisis, but it might also radically improve mental health.