Co-living is emerging as the new star in the property investment galaxy!
According to Knight Frank, nearly 2,500 new co-living beds were completed in the UK last year, marking a 65% increase from 2022. This brings the total number of operational co-living homes to 7,540. And guess what? There are another 13,483 units either under construction or with planning permission!
Why the buzz? Well, it seems institutional investors are flocking to this sector. Since 2020, nearly £1 billion has been poured into funding or acquiring co-living developments. Knight Frank's 2023 UK Living Sector Survey reveals that 45% of leading institutional investors plan to invest in co-living by 2028, up from 32% who have already dipped their toes in.
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London has been the primary hub for co-living, but regional cities like Manchester, Liverpool, Sheffield, and Birmingham are catching up fast. These cities boast large populations of young professionals, strong graduate retention rates, and expanding job markets, making them hot spots for co-living developments.
Interestingly, co-living isn't just for the big cities. Smaller markets like Woking, Reading, and Guildford are also seeing new schemes. In total, 33 local authorities across the UK have co-living projects either completed, under construction, or with planning permission.
The sector is meeting the needs of a diverse demographic, with 72% of co-living tenants aged between 26 and 40. The largest group is aged 31 to 35, showing that co-living is not just for students and post-grads anymore.
Knight Frank's experts, Oliver Heywood and Ewa Scott, highlight the sector's strong fundamentals, including robust occupancy rates and premium rental yields. With affordability constraints for first-time buyers, the demand for quality rental housing is only set to grow.
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