Demand for co-living surpasses supply

Gerald Eve’s Co-Living Operator Survey provides a comprehensive analysis of the sector, highlighting its increasing appeal in London and beyond.

Co-living development | BTR News
Co-living development opposite Blackhorse Lane station.

Real estate advisor and Newmark company Gerald Eve has released new research into the co-living sector. The data found that whilst London’s potential market for this type of accommodation is 600,000 beds, supply is forecast to reach just 11,500 beds by 2027, further highlighting the supply and demand imbalance.

Co-living has been found to present significant investment opportunities, particularly in certain areas. Gerald Eve’s survey found that within Zones 2 and 3, the investment yield for existing stock ranges from 4% to 4.75%, reflecting a mix. However, recent prime funding deals in London are showing yields of between 4.35 and 4.5%. 

“Our research underscores co-living’s potential as a resilient and adaptable housing model in the face of rapidly changing urban lifestyles and housing needs. The sector is clearly experiencing dynamic growth, offering new living solutions that cater to a diverse urban population. Meanwhile, the GLA’s recently published space standards provide helpful guidance for developers and greater flexibility with regards to the provision of communal space. This report clearly marks out co-living as part of the housing solution for today’s rapidly changing cityscape. Of particular note is the role of co-living in catering to the needs of single renters – a segment of the market historically under served by traditional rental markets.”

Jo Winchester, Co-living Consultant, Gerald Eve

Students represent between 10% and 96% of occupants, depending on location. Whilst London has a student population or potential market of 370,000 students, there are just 100,000 purpose-built student accommodation (PBSA) beds – representing a significant gap in the market that co-living is primed to fill.

The research also uncovered key trends pertaining to tenants. In London, the typical co-living tenant is on an average salary of £37,375 per annum, renting for a term of 12 months, with 46% of tenants from overseas. And, whilst the capital’s typical tenant has an average age of 28, the age range is from 17 to 67 years old.