As house prices continue to rise, more young professionals are opting for the shared housing accommodation model.
In this article you will learn about:
- The co-living concept
- Who it appeals to
- The pros and cons of shared spaces
- Examples of co-living companies
- The outlook for this housing model
To find out about all the facts, jump in!
What is co-living?
It is a shared living space model, providing good quality rental accommodation in cities designed to appeal to young professionals, combining private space and communal living areas with flexible terms. Typically, the model works by offering a private bedroom and bathroom with shared kitchen, working and living space areas which may include gyms, cinema rooms, bars and even swimming pools. Buildings are usually owned and run by co-living companies and offer an increasingly mobile generation short-term, flexible rental contracts.
In many high-priced cities, communal living is increasing, with young people attracted to the concept due to often lower costs, convenience and a sense of fostering community; the trend is perhaps a response to the problems of rising house prices and social isolation.
Communal history
Co-housing is not a new concept, historically people have always chosen to live together, whether in camps, caves or houses for reasons including mutual dependence, food, safety and community support. It differs from other private rented sector developments in that it is large scale, purpose-built residential accommodation with studio style rooms, spacious communal areas and high-quality facilities. Some purpose-built student accommodation providers are branching into providing co-living as their model is similar.
As a property type, the model offers a more land efficient alternative to traditional residential accommodation, enabling developers to build more units per plot (Allsop, 2020). However, some shared space accommodation has been criticised for its room dimensions; as co-living development is designated as `unique’, it does not conform to standard housing classification and small units have resulted. Developers have been criticised for appearing to capitalise on the demand from millennials for such city centre living, but small living spaces can result in high tenant turnover as people find them too restrictive long term.
Who does it appeal to?
Millennials and younger people, attracted by the concept of a sharing economy, may be drawn to co-living spaces, although the age range of those who enjoy this style of accommodation differs widely: it may also appeal to an ageing population.
Having an instant support network of potentially like-minded professionals in a city centre environment is attractive for many renters, along with the combination of quality accommodation and flexible terms. Technological progress has created a globally transient workforce and the convenience of co-living is suited to those travelling from abroad on work contracts of different lengths.
Other typical co-housing renters include remote workers, urban professionals and those who appreciate the idea of openness and communal spaces.
The advantages of shared housing:
- One all-inclusive monthly fee which often includes Council Tax, broadband and laundry facilities
- Wi-Fi and utility providers are already set up
- Potential for easy networking with people sharing similar interests or professions
- Often no deposit is required
- Daily events organised in the same building
- Shared spaces and well-designed accommodation
- Flexible tenancies are available, from days to months
- In some cases, it can be cheaper than conventional renting
- Apartments are often furnished and include cleaning services
- No fees for letting agents or lease renewals
- It provides a stop-gap between university and the next step
The downsides of the co-living experience:
- Small room sizes in some development
- There are no social tenancies offered if developers operate the premises
- Associations with the latter-day commune concept may be off-putting
- If the accommodation is operated by the developer, residents have no control over management issues
- The cost of short-term convenience often comes with a high rental price
Co-living companies:
The sector has suffered during the pandemic, being hit by travel restrictions and social distancing rules while operational costs were ongoing. Those providers which survived are reassessing their businesses; some are consolidating and merging and those appear to be flourishing as demand for the shared living model remains strong in major cities.
The Collective
Founded in 2012, The Collective https://www.thecollective.com/ describes itself as `a global living movement’ and has locations in west London, Canary Wharf in east London and New York City offering individual studio apartments with shared living and co-working space along with organised events, all included in one bill. The living spaces include libraries, restaurants and cinema rooms. Residents can stay for a few nights or for months; there is a 24/7 support team, which during the pandemic was on hand to check on residents and even delivered food and medicine. At The Old Oak site in west London in January 2022, the price for a month for a studio with a private bathroom and private kitchenette is typically from £1296, while an ensuite room with a private bathroom and shared kitchenette is from £1083. The 705 room Canary Wharf site, which boasts a swimming pool and golf simulator, charges £1863 per month for a three month stay or £1430 per month for 12 months. The Collective is seeing strong demand for its offer and is adding to its portfolio; the company sees its role as to challenge the status quo of the existing property market and offer people more from their homes.
Common
Common https://www.common.com/ operates in 12 major cities across the USA where it is the leading build to rent and shared living provider. It and has plans to come to London where it is targeting key boroughs and aims to open 3,000 apartments by 2023. Its offer of a stress-free, all-inclusive shared living environment includes one monthly bill, fully furnished space, a range of amenities and events and management of all property maintenance issues. It partners with local and national brands to give discounts to renters.
Unity
Operating in Sweden, Finland and Denmark, Unity creates loft apartments and city centre studios offering a work life balance which the company feels is missing from the market. Unity https://unity-living.com/ adopts a sustainable approach from the construction to the décor of its properties, using local suppliers, chemical-free cleaning products and carbon footprint menus at its restaurants.
WeLive
The co-working organisation WeWork now operates WeLive https://coliving.com/company/welive which offers fully furnished apartments on flexible rental terms in New York and Washington DC.
Quarters
This Berlin-based co-living developer has premises in America. Quarters https://quarters.com/ currently has plans to expand into Europe.
The outlook for co-living
Demand appears to be rising in cities, for instance Manchester has £450m of co-living investment deals agreed (Property Week, 2021). Post-Covid-19, a trend has emerged for those living alone in rented accommodation to move to shared living spaces, possibly as people reassess what they want from their homes or from fear of isolation in any future lockdowns.
Co-living accommodation is a response to our changing society, catering for the increasingly mobile generation and the growing number of self-employed Britons. The quality of the offer would seem to be the crux issue for the young professional target-market, which must consider whether the flexibility and convenience of co-living warrants the downsides.
What do you think?
We would love to hear about your shared housing experience, or your thoughts on whether it will become an increasingly popular option. Let us know!
References
Allsop. 2020. Does co-living have a role to play in the private rented sector? [Online]. Available from: https://www.allsop.co.uk/media/does-co-living-have-a-role-to-play-in-the-private-rented-sector/ (Accessed 13thSeptember 2021)
Property Week. 2021. Co-Living must evolve to thrive. [Online]. Available from: https://www.propertyweek.com/insight/co-living-must-evolve-to-thrive/5112567.article (Accessed 13th September 2021)
Serviced Apartment News. 2021. The Collective appoints bank to explore sale options. [Online]. Available from: https://www.servicedapartmentnews.com/news/urban-living-news/the-collective-appoints-bank-to-explore-sale-options/ (Accessed 10th September 2021)
Bloomberg.com. 2021. The Collective said to explore sale. [Online]. Available from: https://www.bloomberg.com/news/articles/2021-06-16/the-collective-said-to-explore-sale-as-pandemic-curbs-co-living (Accessed 10th September 2021)
Co-working Resources. 2021. The rising trend of co-living spaces. [Online]. Available from: https:www.coworkingresources.org/blog/coliving-spaces (Accessed 9th September 2021)
The Guardian. 2019. Co-living. [Online]. Available from: https://www.theguardian.com/cities/2019/sep/03/co-living-the-end-of-urban-loneliness-or-cynical-corporate-dormitories (Accessed 9th September 2021)
