Planning applications for the delivery of 9,000 co-living units were submitted in the UK last year – up 87% on the 2023 figure, according to new data from Savills.
The company’s research indicates there are now around 9,000 co-living units operational across the UK with approximately 5,500 more under construction.
Cities with strong graduate retention rates, such as London, Manchester and Birmingham, are key markets for new co-living developments, Savills’ data shows. London leads the way with a 59% graduate retention rate and a total of 158,000 graduates entering the workforce annually.
Across London, 23 boroughs have adopted or are developing policies on co-living and although some have introduced restrictions, the majority remain supportive of new schemes, presenting opportunities for further growth in the capital as well as paving the way for secondary cities, according to Savills.
Paul Wellman, associate director, residential research at Savills, said: “Co-living is emerging as a vital addition to the UK’s rental landscape. With rising rental costs and a shrinking PRS, co-living offers a practical, high-quality housing option that delivers value for money while addressing the evolving needs of city renters.”
Lizzie Beagley, head of PBSA and co-living transactions, Savills operational capital markets, added: “As the BTR market continues to grow, now with 106,000 operational multifamily homes, co-living is emerging as a distinct sub-sector within the wider institutional market. It has attracted interest from investors such as Cain International, Blackrock, Real Star, Crosstree, DTZIM, APG and CDL.
“The transactional evidence is still sparse due to our still being in the development cycle of the market. However, we are seeing success from established operational portfolios such as DTZIM (Folk), Dandi, Vita (Union) and Scape (Morro) in some excellent second-generation co-living schemes, which will no doubt continue to strengthen broader investor confidence.”
