Knight Frank – The Co-Living Report

Co-living is a growing trend in the UK, with 2,500 new co-living beds opening last year and a total of 7,540 operational co-living homes in the country. Institutional investors have shown increased interest in the sector, with nearly £1 billion invested in co-living developments since 2020. The sector is driven by factors such as housing supply/demand imbalances, population growth, and shifting consumer attitudes. Affordability constraints for first-time buyers have also fueled demand for rental housing, leading to significant rental growth. The appeal of co-living lies in its flexible housing options, social interactions, and high-quality accommodation at affordable rates in central locations. Strong tenant demand is seen in operational schemes, with high levels of satisfaction reported among residents. Investors are increasingly considering co-living for existing and potential sites, as evidenced by the growing capital being deployed in the sector. Notable transactions include partnerships to fund new co-living developments in London. The future growth of the co-living sector is expected to continue, driven by investor interest and strong tenant appeal.