The UK co-living sector grew by 65% in 2023, with nearly 2,500 new beds delivered, according to new research from Knight Frank.
The company’s Co-Living Report 2024 found there has been a fivefold increase in the total number of co-living homes delivered in the UK since 2019, with 7,540 homes currently operational.
Knight Frank expects co-living supply to nearly treble to more than 20,000 beds within the next three years, based on the current pipeline of developments.
Investor appetite for co-living has also been robust over the past few years, with nearly £1bn spent on acquiring or funding co-living developments since 2020. Knight Frank’s latest UK Living Sectors Survey found 45% of living sector institutional investors intend to invest in co-living by 2028 – up from the 32% of respondents who have already invested.
Oliver Knight, head of residential development research at Knight Frank, said: “The potential market for co-living comprises 1.7 million individuals currently renting in shared accommodation in urban centres across the UK. The co-living sector’s growth trajectory is impressive, with a fivefold increase in complete homes since 2019. This rapid expansion in supply reflects the sector’s growing maturity and its ability to meet evolving housing needs. As larger schemes come to market and institutional investment increases, co-living is cementing its place as a key component of the UK’s wider rental landscape.”
Oliver Heywood, partner in the residential investments team at Knight Frank, added: “The surge in institutional interest in co-living is a clear indicator of the sector’s potential. As more investors recognise the value proposition of co-living, we expect to see continued growth and innovation in this space, particularly in urban centres where housing demand remains high.”
Ewa Scott, associate in the residential investments team at Knight Frank, said: “”From a valuation perspective, we’re seeing increasing confidence in the co-living sector among lenders. This is underpinned by robust fundamentals such as strong occupancy rates, premium rental yields compared to traditional residential assets, and the sector’s resilience during economic fluctuations. The rapid lease-up periods we’ve observed, often averaging four beds per day in some developments, coupled with high tenant satisfaction rates, are providing lenders with the assurance they need to back these projects.”
