A report by Conscious Coliving found significant opportunity for further investment in co-living developments with demand outpacing supply by more than 30 to1.
As a key part of the ‘Why Co-living? (WhyCo)’ advocacy campaign, the ‘Building Homes, Supporting Urban Regeneration and Fostering Communities through Co-living’ report highlights a critical shortfall and growing demand in the co-living space. This presents a major opportunity for real estate investors, developers and policymakers to tap into an underserved market that offers strong financial and ESG returns.
Based on extensive market research, case studies and contribution from industry leaders, including data from CBRE and Experian, the report demonstrates co-living as a scalable, futureproof housing solution that addresses the UK’s affordability crisis, climate targets and shifting lifestyle demands.
With a potential target market of 3.7m renters across the UK, driven by a surge in single-person households, students, key workers and urban professionals, current co-living provision is not keeping up with demand. There are just 11,000 operational beds available, with the majority concentrated in London, leaving vast unmet demand across the regions.
The report, which is backed by major players such as Assael Architecture, Bridges Fund Management, the British Property Federation, Cascade Communications, CBRE UK, HUB, The Furniture Practice, Rund, Shoosmiths, urbanbubble and VervLife, outlines the urgent need for coordinated industry and policymaker action to close the gap and support a more inclusive rental market.
“This data highlights a clear supply-demand imbalance in the need for co-living” says Kirsten Dyer, Senior Director at CBRE UK, one of the lead data partners for the report. “While the demand pool is accelerating, particularly among 18–45-year-olds in urban areas, supply has not kept pace, resulting in high pre-let rates and missed regeneration opportunities in regional cities where co-living can be used to provide much needed housing and choice for renters.”
London remains the dominant co-living hub, accounting for 54% of operational beds, followed by Manchester. Yet the report identifies regional cities such as Birmingham, Sheffield, Bristol, and Glasgow as ripe for investment with up to 56% of local private renters aged 18-45, matching co-living’s core demographic.
The report also demonstrates co-living’s positive social and environmental impact. For example, co-living schemes are up to 2.5-4 times more energy efficient than traditional one-bedroom flats, while initiatives by operators including Noiascape and Folk demonstrating strong community investment. The report also highlights that 76% of co-living residents surveyed at a Swedish operator COLIVE in Q4 2024 reported not feeling lonely, compared with just 53% of the general EU population. Only 5% of COLIVE’s co-living residents reported feeling very lonely, versus 12% EU average.
Damien Sharkey, Managing Director at HUB, noted: “Co-living isn’t just an asset class, it’s a response to societal shifts. It’s about creating high-quality homes where people feel connected, secure and supported. The sector’s evolution shows it can and should be a central part of urban housing strategies.”
A central part of the WhyCo campaign is to breakdown barriers to further development by providing evidence of the benefits of this new tenure of housing to decision makers. Matt Lesniak, Co-Founder of Conscious Coliving, who leads the campaign and research, emphasised the importance of collaboration: “Our findings reinforce the role co-living can play in tackling housing pressures, loneliness and sustainability. But to scale responsibly, we need stronger alignment between investors, developers and local authorities, and the efforts of the WhyCo campaign have already contributed to this and we aim to continue these collaborations and research.”
To unlock the full potential of co-living in the UK, the report outlines several priority actions for policymakers, investors and developers including establishing clear and consistent national planning guidance, incentivising delivery in regional cities and encouraging inclusion of co-living within wider masterplans, including key worker co-lving.
The report also urges greater collaboration between local authorities, operators and community stakeholders to ensure that co-living schemes deliver not just on housing numbers, but also on social value, sustainability and wellbeing outcomes.
“Co-living is ready to scale to meet this potential market,” said Kate Butler, Associate Director of Real Estate at the British Property Federation. “But we must align policy, planning and investment to ensure the model can thrive and evolve, especially in areas where traditional housing supply falls short.”
Core partners and contributors to the WhyCo report include: Assael Architecture, Bridges Fund Management, the British Property Federation, Cascade Communications, CBRE UK, HUB, The Furniture Practice, Rund, Shoosmiths, urbanbubble and VervLife.
You can download the report here: www.consciouscoliving.com/why-coliving/
