Co-living, also known as communal living or shared living, is a living concept where residents live in a shared residence and share common amenities. Co-living has evolved significantly over the years and can now appear in many forms.
In the past, people chose to live together mainly due to financial constraints or lack of available housing. These motivations still exist today, but co-living is now more often a choice for those seeking to belong in a community. Recently, there has been an increase in the number of purposefully-built co-living spaces, which offer shared amenities and private apartments for rent.
These living spaces are typically targeted toward young professionals and students. Overall, the evolution of co-living has been driven by a combination of economic factors, the desire for community and connection and the preferences of younger generations. As the cost of housing continues to rise, it is likely that we will see an increase in the popularity of co-living.
The benefits of Co-living?
A defining characteristic of living together is that people can split their living space and therefore, their living costs – like for energy consumption from the laundry facility or internet use. This creates affordable co-living homes with an overall lower cost of rent, utilities, and other expenses.
Saving money is one of the main reasons residents choose shared living spaces.
Co-living communities of like-minded people are an important reason to choose a co-living space, as it provides a social connection that cannot be found in traditional rentals.
Sharing a home and attending events with people with similar interests can help reduce social isolation and loneliness among residents.
Lastly, co-living is often convenient because it provides modern homes with fully furnished rooms and all necessary amenities. Furthermore, operators offer the flexibility of short-term contracts but also the stability of long-term contracts. For remote workers this is especially ideal.
What are the risks for an investor?
Living with others can increase the risk of conflicts between peers. Conflicts can arise from different issues, such as noise, cleanliness, and personal boundaries. Open communication and being respectful of others needs and preferences are key. Compared to private areas, shared spaces can be more vulnerable to damage because they are used by multiple people. This can include shared areas such as kitchens as well as shared items such as furniture and appliances.
However, most co-living spaces offer extra cleaning services for the communal areas and/or provide cleaning supplies for members.
Residents can then reach agreements among each other to keep the spaces they share clean and reduce potential damage.
Could repurposing some of the student PBSA, to Co-Living accommodation, in cities struggling with occupancies be a solution to improving their occupancy rates? Graysons Properties have over 10 years experience in managing co-living spaces. Please contact us if you are interested in re-purposing your assets. You can contact our CEO on akash@graysonsproperties.co.uk
At Graysons Properties, we view student property as a pivotal aspect of the real estate market, encompassing buying, selling, and letting activities. It presents a lucrative investment opportunity for landlords and investors, with promising yields.
In recent years, the broader property market has seen significant transformations, prompting the need to evaluate the trajectory of the student property sector.
Demand Trends: The consistent increase in student enrolment at UK universities is a notable trend, expected to persist due to the growing population of 18-year-olds. Government forecasts indicate a 7% rise in student loan demand by 2027/28, suggesting a corresponding increase in the need for student accommodation.
Supply Landscape: Student accommodation enters the rental market through various avenues, including university-provided halls, purpose-built student accommodation (PBSA) developments, and private student house shares. While PBSA supply has grown substantially, concerns linger regarding its ability to keep up with rising student numbers. Challenges such as cost uncertainties, labour shortages, and regulatory changes may impede future supply.
Additionally, there’s a noticeable tightening of supply in the private student accommodation sector, influenced by regulatory changes and alterations in tax incentives, prompting some landlords to divest their properties.
Current Market Conditions: Reports highlight a shortage of student accommodation, with students encountering difficulties in finding suitable housing. Instances of universities resorting to temporary accommodation or deferral suggestions for students underscore the severity of the shortage.
Recent assessments by StuRents reveal significant shortfalls in student beds across various towns and cities, with projections indicating a widening gap in accommodation availability by 2025. Areas like Durham, Glasgow, York, and Manchester are notably affected.
However, not all student-centric cities have experienced increased demand. For example, places like Coventry and Sheffield are grappling with an oversupply of accommodation. If you’re an investor in a city with surplus housing, Graysons Properties is prepared to meet with you to explore strategies for diversifying your assets and improving occupancy rates.
Future Outlook: The evolving landscape suggests a paradigm shift in the student property market, potentially transitioning from historical equilibrium or surplus to a shortage scenario. Anticipated growth in demand coupled with constrained supply could lead to a student housing crisis.
Implications: Stakeholders in the student property market may need to make strategic adjustments. Students may have to plan ahead and budget for higher rents amid increased demand and rising costs. Agents may experience greater demand but may also need to exert more effort in finding available properties.
Landlords and investors, however, may find opportunities for higher yields, potentially sparking renewed interest in the student property market.
In essence, the changing dynamics signal a significant shift in the student property market, requiring proactive measures from all involved parties to navigate the evolving landscape successfully.
Our team at Graysons Properties is eager to assist investors like you in understanding these shifts in property demand and ensuring that your investments continue to generate the desired returns. Please feel free to reach out to our CEO, Akash, at akash@graysonsproperties.co.uk if you’d like to discuss your assets further.
