Beyond homeownership: The growth of co-living
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What is the co-living model?
Co-living is a dynamic and evolving concept within the modern housing landscape, bringing together private resident accommodation, with a suite of shared communal amenities such as, a gym, shared workspace, library, cinema, laundry and more, all under one roof.
“The sector is in its relative infancy in the UK, but there are signs that it is set to grow significantly in the coming years, driven by strong trends of population growth, urbanisation, an increase in flexible working and other lifestyle preferences amongst younger generations” (Savills, 2025).
The internal elements reflect that of a social living philosophy, centered around shared spaces and facilities and wellness areas both indoors and outdoors. The model is built around community, affordability and convenience, core elements of the rental market. Unlike traditional rental apartments, co-living facilities offer residents an all-inclusive pricing model, combining rent, utility bills etc. in one payment.
Although co-living developments often look like many other urban residential buildings, the internal design is often targeted to attract contract workers, young professionals, and key workers who are looking for a different type of accommodation, one that encourages community and socialising.
The developments tend to offer residents 200 – 320 sq ft studios or one-bedroom apartments, with en-suite bathrooms, and private kitchens, built to work for modern living. The developments often come with additional security measures and on-site staff, offering a safer environment for residents.
Why is it growing?
The private rental sector is struggling to meet market demand. There are also affordability challenges that face those looking to take their first step on the home ownership ladder that prices many out of the market.
High housing costs, combined with a lack of available homes to rent means that there is a demand for flexible living options, fueling the demand for alternative accommodation solutions (Zoopla, 2025).
With the rising cost of living in the UK, and specifically in major cities such as London, Manchester, Birmingham and Cardiff, renters are looking for more for their money. The ability to access facilities they would normally have to travel to, with the comfort of a high-end hotel, makes co-living developments more desirable for modern young professionals.
Co-living is a growing sector across the UK, but specifically in the larger cities, that addresses both the housing shortage, and the demand for community-driven housing.
What are the benefits?
Co-living developments are built with the sole intention of renting, rather than ownership. Flexible lease terms mean that residents can come and go from their apartment/studio without having to pack up their belongings if they are travelling for work, visiting friends etc. This is more beneficial than a hotel where they would have to check out and check back in again, possibly to a different room.
Co-living is a valuable addition to the UK’s Private Rented Sector, providing greater choice for residents (Savills, 2025). These developments are not just working in larger cities, in 2024, there were co-living schemes either complete, under construction or with planning permission granted in over 30 local authorities, many of which are within a commutable distance of larger cities.
Client story: Dandi Living
Dandi co-living residents are diverse in age, ranging between 18 to 74, with the majority of residents aged between 30 and 35. The culture within the residences is hospitality driven, elevating the residents' mood, wellbeing and sense of positivity, creating a truly relaxed and welcoming place to live in bustling cities. By creating a hospitality centered environment, Ali believes that Dandi nurtures social engagement with the wider community "through art that transcends cultural and linguistic boundaries".
What does the future hold?
On average, over 865 co-living units have been developed each year since 2016, and based on current pipeline of consented schemes, this could increase to 3,430 per year from 2024 to 2027 (Knight Frank, 2024).
Principality Commercial currently funds a number of co-living developments, which support our strategic ambitions of the delivery of more new homes.
Ultimately, homeownership is the desired route for many people, however, co-living offers another option for those wanting to live in urban centres with vast employment opportunities. These high quality rental properties are appearing across the UK and Principality Commercial are working with developers to bring these to market.
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