Co-living will become an increasingly large part of the UK residential rental market, with around £540m of transactions expected in the first half of 2022, according to Savills.
The firm estimated that the co-living sector has a potential core target market of 725,000 residents, including almost 160,000 in London alone.
With just 24,000 operational and pipeline units in the formerly nascent sector, it said there was tremendous scope for growth.
Co-living units are single-bed studios that share communal facilities such as gyms, co-working spaces, resident lounges and cinemas, professionally managed and with an all-inclusive monthly rent.
Co-living rents tend to be around 20% lower than an equivalent build-to-rent studio once additional bills are accounted for.
James Hanmer, head of UK PBSA investment and co-living at Savills, said: “There is an increasing desire by many to live in urban locations, close to jobs and in schemes that offer a strong sense of community and high-quality amenities. This underpins our belief that co-living is now set to follow multifamily/build to rent and the purpose-built student accommodation sectors, in becoming an increasingly large part of the UK rental market.”
Savills said the future pipeline of co-living units is split equally between London and regional cities such as Birmingham, Manchester, Sheffield and Glasgow.
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