The UK co-living sector experienced phenomenal growth in 2024, according to research by Savills.
According to Savills’ UK Co-Living Spotlight, 9,000 units were submitted for planning in 2024, up 87 per cent from 2023. Across the UK, 5,500 co-living units are currently under construction, in addition to the 9,000 already operational.
Despite construction facing challenges due to market conditions, falling inflation and building costs, the increased pipeline has been driven by a 43 per cent increase in rents across London and the UK’s ‘Big Six’ cities over the last three years and higher demand for accommodation, particularly in cities with a high graduate population.
The report found that cities with strong graduate retention rates, such as London, Manchester and Birmingham are key markets for co-living developments.
Furthermore, across London, 23 boroughs have adopted or are developing policies on co-living. While 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.
What they said
Lizzie Beagley, head of PBSA and co-living Transactions, Savills Operational Capital Markets said: “As the BTR market continues to grow, 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, which will no doubt continue to strengthen broader investor confidence.”
Paul Wellman, associate director, residential research at Savills added: “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.”