Planning system must support co-living, not stifle it

With the growth of the co-living model, Shoosmiths highlight the need for clear and flexible planning guidelines.

Matt Nixon, Legal Director and Planning Specialist at Shoosmiths highlights the need for clear and flexible planning guidelines for co-living | BTR News
Matt Nixon, Legal Director and Planning Specialist at Shoosmiths highlights the need for clear and flexible planning guidelines for co-living.

While co-living has yet to fully take off in the UK, the model is growing – buoyed by the entry of developers and operators into the sector, investor interest and increasing occupier demand.

Much of this development activity has been concentrated in London, with a report from Cushman & Wakefield ranking the capital as having the biggest growth potential for co-living. 

Manchester, Edinburgh and Bristol closely follow in the rankings, with substantial room for expansion. For example, in April, we saw Whitbread unveiling its plans to replace a Premier Inn hotel in Bristol with two buildings – working with development partner, Olympian Homes, to redevelop a 0.3 hectare site, creating a blend of co-living and student accommodation.

However, one of the main obstacles currently limiting the model’s potential is planning.

Planning vagaries

Co-living is a relatively new concept in planning terms, and, as can be expected, market trends continue to move considerably faster than the planning system. Vagaries and regional policy differences are posing difficulties for developers when bringing projects forward.

Despite the cycle of planning consultations, co-living’s proposed uses are often still shoehorned into different parts of the Use Class Order or sui generis – a category or land use class that does not fit into any of the standard use classes for planning purposes.

The absence of a dedicated planning classification has led to inconsistent approaches to co-living among local planning authorities. This inconsistency and subsequent uncertainty are not only stymieing development, but also affecting developers looking to enter the sector or expand their offerings.

For most developers aiming to deliver a co-living scheme on a blank site, the primary commercial option is to obtain planning permission for the existing sui generis use.

This approach is not without its risks though. A scheme can take years to progress through the planning system, with little certainty of approval. As such, the more immediate opportunity lies in the redevelopment of existing buildings situated within the grey areas of planning law, which can be more readily repurposed for new co-living accommodation.

A common theme in the queries received by Shoosmiths’ planning team relates to whether a particular use could be utilised for co-living ‘type’ accommodation and the tipping points that could result in it moving from one use class to another, or outside the sui generis use.

In cases where an express grant of planning permission is not being obtained, it is vital to consider how co-living fits within the planning system and potential areas of overlap. 

One of the most logical ways to consider this point is to set out the ways in which co-living is not subsumed within other uses. 

Firstly, co-living is not conventional residential (Use Class C3) as it provides for non-self-contained dwellings, with an emphasis on shared living. It is also not a hotel or aparthotel (Use Class C1), because it is not just aimed at the short-term market and typically requires at least three-month tenancy terms. There is an argument that the planning lines are blurred, however, as co-living is offering a private space with extra facilities on-site.

It is also not a traditional hostel (sui generis), because hostels typically – not always – house a group of people with a common need, with some services being provided. This is a more uncertain area, however, as hostels can operate on a multitude of different platforms and can embrace long terms uses, as well as transient accommodation.

Whether co-living can be treated as a large house in multiple occupation (sui generis) is a harder question to definitively answer, but appears to come down to the extent and type of the facilities being provided and the way in which the property is managed. 

Changes of use

The primary consideration for developers when analysing the potential for co-living at an existing site is whether there will be a material change of use from the existing lawful use.

The consideration of material changes of use was recently addressed in the courts – specifically focusing on whether housing asylum seekers in hotels in the UK constitutes a change of use from a hotel to a hostel. While a separate matter, typical considerations revolved around the planning harm that can be identified and the potential changes in the ‘character’ and ‘intensification’ of use.

Of particular relevance to this discussion was the case of Panayi (1985), which held that, “the fact that, in the broadest sense, the property continued to be used for residential purposes does not mean that there could not have been a material change of use.”

As a relatively new type of housing, clear and flexible planning guidelines will be essential to the growth of co-living in the UK, especially for developers looking to repurpose assets.

The model’s focus on building a community and social offering remains a nebulous concept when it comes to the planning system, so establishing a consistent national approach will be crucial to avoiding legal conflicts. For example, could a local planning authority currently seek to enforce a use because of a lack of community cohesion at a co-living scheme?

An effective starting point would be enshrining guidance on co-living in the National Planning Policy Framework (NPPF). The NPPF already deals with specific parts of the residential sector, including senior living, and considering the potential of the co-living model – providing much needed residential space and a sense of community – it must also be addressed.

This is a message already being echoed at an industry level, with the British Property Federation’s 2023 co-living report stating that: “The NPPF should provide active support for co-living schemes and require local authorities to include an allocation for co-living schemes in their local plans.” It also added: “Policies should not be too prescriptive and should allow the market broad parameters within which to bring forward co-living developments.”

The success of the co-living model in the UK hinges on providing developers with the clarity and flexibility that is necessary to bring these unique schemes forward in a way that remains safe and viable. The planning system must support co-living, not stifle it.