The pros and cons of co-living

As the housing landscape continues to evolve in the UK, co-living spaces have emerged as an attractive alternative to traditional living arrangements. But while there are plenty of benefits to shared living arrangements, there are also drawbacks, as evidenced by the collapse of The Collective. So what are the key upsides – and downsides – of co-living?

Co-living spaces, where individuals rent private rooms within a larger residence and share communal areas like kitchens, living rooms, and sometimes bathrooms, offer more of a sense of community, flexibility and affordability than many traditional living arrangements.

Unsurprisingly, they have become increasingly popular among younger generations as they provide social interaction and networking opportunities, helping to combat loneliness and isolation. They are also cheaper to rent and allow residents to share utility costs.

Some providers go even further in terms of sharing the costs. For instance, co-living concept Oppidan has proposed shared resources including food essentials, living supplies, cleaning and four hours of free car hire per month, to be included in tenants’ single monthly payment.

This is particularly appealing in cities like London, where the cost of living is high and affordable housing is scarce. The current economic challenges and cost-of-living crisis make it increasingly difficult for young professionals and students to secure affordable housing in major cities. The social aspect of co-living spaces, such as shared co-working spaces and lounges, can be particularly appealing for those seeking a more immersive and engaging living experience. Two further benefits are the flexible lease terms and furnished units.

Technology has driven the growth of co-living. Leading providers such as Gravity Co-living, and Lyvly have developed apps that enable residents to connect, socialise, manage payments, reserve shared spaces, and coordinate events. Messaging platforms like WhatsApp and Facebook groups further enhance communication among residents.

Co-living spaces have the potential to benefit the wider housing market by promoting urban regeneration and contributing to more affordable housing solutions. By repurposing existing buildings and creating innovative living spaces, co-living can revitalise urban areas and provide housing options for diverse residents. They also complement existing housing options such as traditional houses, flats, social tenure and the growing build-to-rent sector.

However, co-living spaces also have their drawbacks, including less privacy and potential conflicts with other occupants stemming from differences in lifestyles. Additionally, some co-living spaces may have limited common areas or amenities, leading to competition for and contention over communal resources.

Co-living providers also face challenges in obtaining planning permission due to concerns about infrastructure, density and parking. Wandsworth Council in London recently rejected a co-living scheme on the grounds of the potential pressure it would put on local transport and parking. This underscores the need for collaboration between providers and local authorities to address concerns and find suitable solutions.

The collapse of The Collective provides industry lessons about the risks of rapid expansion, especially during economic downturns and the Covid pandemic. The company’s failure to find a buyer and its focus on luxury co-living units with compact footprints exposed vulnerabilities. Co-living providers should consider their target demographic to avoid similar pitfalls.

Successful co-living spaces in the UK, such as Vonder and Pollen, showcase the positive aspects of community, amenities and affordability. These examples highlight the potential for co-living to offer a comfortable and sociable living experience.

As the sector evolves, it presents an attractive investment opportunity. Learning from past successes and failures, developers can create thriving communities that cater to target demographics, potentially making it a profitable sector. Co-living not only addresses housing challenges but also fosters sought-after connected communities. With the right strategy, co-living spaces have the potential to be a lucrative investment and a sought-after type of home.