Share: Share on Facebook Share on Twitter Share on LinkedIn I recommend visiting to read:%0A%0A {0} %0A%0A {1}
Co-living Co-living

Co-Living: In an ever-changing market, where do the hurdles and opportunities lie for the sector?


Despite initially emerging in scale in 2016 with the opening of The Collective Old Oak, more than six years on, the co-living market remains in relative infancy. While the fluctuating macroeconomic environment and COVID-19 pandemic have clearly slowed this sector's progress, the ever-maturing build-to-rent (BTR) and purpose-built student accommodation (PBSA) markets have not experienced the same stifled growth.  


Land & Planning

Regardless of the ongoing economic challenges, the land market, particularly in London, remains incredibly competitive due to a lack of supply and an abundance of existing and new entrants in the market. If a site is secured, the next and potentially largest hurdle relates to planning, where challenges abound and become exacerbated through delays, uncertainty, and significant cost.

Defined planning barriers and rigid use classes at national level, conflict with nuanced policy and the political stance at local government level. This is evident across London where strict and prescriptive emerging policy from the Greater London Authority (GLA), conflicts with the appetite of Local Authorities, some of whom appear to regularly change their stance depending on local politics. This confusion and conflict leads to a protracted, expensive, and time-consuming process, putting off developers and investors alike. 

Operational Experience & Funding

Our key takeaway from earlier co-living products is the misalignment of costly amenity space, between what is provided and how much is used. Previous schemes have looked to place greater emphasis on community engagement, including extensive staffing, overlooking the role of co-living as an affordable alternative, and hampering operational performance. This operational efficiency is further hampered by rigid and extensive planning guidance, such as the GLA requirement to have a certain number of kitchens per person (0.6 sq m per person). There is a push for a kitchen on each floor, regardless of the number of beds—again, this is prescriptive and perhaps unrealistic. Developers need to be aware of the impact on gross to net areas and operational costs, which, once proven, will increase institutional investment in this space.


Tenant Demand

From the limited evidence available to date, there appears to be strong tenant demand across operational assets. The two FOLK schemes (Harrow and Earlsfield) have received strong interest to date, clearly demonstrating demand. Living by Scape, in Guildford, which houses 113 beds, was fully let within 7 weeks with an average tenancy length of 11 months. Once refined, why should this sector not perform similarly to BTR?

With an increasing focus on affordability and certainty over future expenditure, operators are finding the all-inclusive nature of their tenancies popular with tenants, as they can be sure of their monthly outgoings while maintaining a good lifestyle in a desirable micro-location. Based on an average bill of £336 for a one-bedroom flat, we calculate a 15% savings in a co-living apartment versus PRS + bills.

Investor Appetite

More confident, adventurous capital is seeing the opportunity to benefit from early-mover advantage, the current weak pound and the ongoing affordability crisis facing private rents and first-time buyers.

That said, the lack of operational comfort that can be provided to incoming funders and the ever-changing goalposts of policy makers is causing uncertainty and delays in the progress of co-living into a more institutional grade asset class. As a result, we are finding that the development markets approach often remains ‘subject to finding an institutional funding partner’, prior to committing to purchasing or delivering a site.

The Future of Co-Living

If we look to the future, the city of 2040 will offer households a greater choice, with a diverse range of living products to suit everyone’s needs. Higher rates of urbanisation and population mobility could see co-living schemes assist younger generations who want to live in cities leave the nest the nest by offering lower rents than BTR. The desire for different types of rental product could see co-living spaces integrated with BTR schemes, rather than standalone assets, thus reducing risk to investors and operators. There is still a considerable amount work to be done, and it will necessitate seismic alterations in the planning system. Co-living has the potential to accommodate change in a post-pandemic world.

Visit the Cushman & Wakefield Future or Cities Virtual Lab to explore how the way we live, work and play will impact our cities in the future.

Ultimately, co-living development and investment is still at the beginning of the journey, offering clear first mover advantage. While being referred to as ‘student accommodation for young professionals’, we are seeing funders view it more closely with BTR. There is increasing traction with the capital markets to invest in what they see as a sub-sector of the BTR market with significant synergies. Few Developers, Investors or Consultancies can point to a track record in this space. However, opportunities lie within the market and Cushman & Wakefield has been heavily involved in a major co-living land transaction in Wandsworth and is currently advising several landowners on an investment and land basis.

If you are interested in exploring more opportunities in the co-living sector or for more information on the current market, please get in touch with Jim Cooper on +44 (0) 7393 736 535 or

Insights in your inbox
Subscribe to get our latest research, thought leadership, insights, and news.



Residential Market Commentary

Housing market activity has slowed, as rising interest rates, high inflation, and a weaker economy has impacted buyers’ confidence. However, there are some early signs of transactions and mortgage approvals picking up.
Millie Todd • 06/12/2023
Build to rent

Build To Rent Quarterly Report

We are pleased to share with you the latest edition of our quarterly residential insights for the UK. 
Mark Clegg • 10/10/2023
Young people around table with laptop

UK Student Accommodation Report

The Student Accommodation Annual Report provides insight into the trends in student accommodation demand, supply and investment during the year to date.
Andrew Smith • 26/09/2023

How we can help

Residential - Capital Markets
Our national Residential Investment & BTR team leads the UK market in providing expert advice to investors and developers looking for new residential investment opportunities, or who wish to acquire, develop or dispose of rented portfolios. 
Learn More
Capital Markets

Are you ready for what’s next in the real estate industry? Our Capital Markets team advises institutional and private owners, occupiers, investors and developers on their most significant transactions.

Learn More
Rethinking Properties
Discover how our strategic rethinking process in the EMEA region helps you unlock the full potential of your commercial property investments. Expert portfolio assessment, scenario-based solutions, and data-driven recommendations.
Learn More


Get in touch and we can assist with any additional information you need.
With your permission we and our partners would like to use cookies in order to access and record information and process personal data, such as unique identifiers and standard information sent by a device to ensure our website performs as expected, to develop and improve our products, and for advertising and insight purposes.

Alternatively click on More Options and select your preferences before providing or refusing consent. Some processing of your personal data may not require your consent, but you have a right to object to such processing.

You can change your preferences at any time by returning to this site or clicking on Cookies.
Agree and Close
These cookies ensure that our website performs as expected,for example website traffic load is balanced across our servers to prevent our website from crashing during particularly high usage.
These cookies allow our website to remember choices you make (such as your user name, language or the region you are in) and provide enhanced features. These cookies do not gather any information about you that could be used for advertising or remember where you have been on the internet.
These cookies allow us to work with our marketing partners to understand which ads or links you have clicked on before arriving on our website or to help us make our advertising more relevant to you.
Agree All
Reject All