Communal developments are the homes that property investors want
It’s well documented that affordability issues are embedded in the UK’s housing crisis. People can’t afford to buy where they want to live. Affording rent is getting tougher, too. These issues are no more evident than in London. Happily, Mayor Sadiq Khan has come up with a plan to solve London’s homes affordability issues. He’s raised the target for new home delivery from 42,000 to 66,000. His London Plan will most surely be great news for property developers and people looking for homes.
Unfortunately, as those in the property development industry could have told Mayor Khan, finding land to build on and getting the necessary permissions to do so is rarely easy – even with planning requirements being eased.
We think that there’s a far simpler solution to the question of affordability in the UK property market, and it’s one that the market would welcome: property developers should build more co-living units.
The target is ambitious, but the how is undefined
The 66,000 homes target is ambitious. If it is delivered, it may influence the housing market in London. But it’s the detail that is disturbing for many. Mayor Khan wants 35% of properties on new developments to be affordable housing, and where the development is built by a strategic partner, this requirement rises to 60%.
The London Plan also emphasizes on smaller sites, delivered by a broader range of developers. What doesn’t the London Plan do is encourage co-living developments – surely a strategy that can be executed to provide the volume of affordable homes that Mayor Khan wants to see?
Co-living is a lifestyle choice for many
Once upon a time, people wanted their separate space. They wanted a home they could call their own. The reward of living in a capitalist country and working long hard hours. Like the saying says, “A man’s home is his castle”. But times are changing. A man’s castle doesn’t necessarily mean an individual home today.
Increasingly, people are willing to share amenities. Why? Because their lifestyle dictates that there isn’t a need for kitchens and lounges. In particular, young professionals and first-time renters – the hardest hit by affordability issues – are happy to rent co-living apartments, preferring to spend their money on their lifestyle rather than an empty space in an apartment in which they only spend a few hours each day.
What do people really want from a home?
People want some basics from a home. These basics include a private bedroom, bathroom, and cooking facilities. A space to put their treasured belongings, and a table at which to eat and work. Beyond this, people are far more willing to share areas such as television and games rooms, laundry facilities, and full-size kitchens. There’s a communal feeling about such homes that people desire, too.
In addition to these amenities, if co-living also means on-site gyms, public spaces and roof gardens, and 24-hour security, all the better. Smaller-style studio apartments that deliver this type of living are housed in hostel-type properties. Residents also have a further benefit: all costs are included in the rental price.
The son of a friend of mine has recently moved to such a property in London. To live in a traditional apartment in the same area, he would probably have to pay what he does just on the rent. On top of this, he would have council tax, utility bills, broadband costs, and so on to pay. And a daily gym session would probably cost him another £100 per month. This is a perfect example of how co-living apartment blocks can deliver the affordable homes that Sadiq Khan demands, and which the UK needs.
The advantage to developing co-living
Co-living quarters offer developers the opportunity to utilise space more effectively, delivering more homes. Different types of units exist side by side – single rooms, studio apartments, and larger two-bedroom mini-apartments. This mix of property type caters to a wider community, from student to young couples and small families.
It means people can afford to live near to where they work, in modern, secure, and functional homes. And because co-living spaces make it affordable to live near to work, commuting is reduced – pollution will fall.
First-time renters might further benefit from apartments that are furnished – another cost saving.
Additionally, people are becoming more mobile, as employers require workers to locate to different offices. Co-living apartments in hostel blocks are leased on very short-term agreements, aiding flexibility of relocation.
As you can see, there are advantages for developers, residents, and the environment.
Is co-living the answer to urban population density?
The UK is undergoing a major shift in living patterns. Homeownership is decreasing, while the private rented sector is growing rapidly. This isn’t simply due to affordability, but to lifestyle choices and the desire of millennials to retain mobility.
Cities the length and breadth of the UK are experiencing an explosion in inner city and city centre populations. Co-living, offering privacy when desired and the sharing of common areas, could be the solution to the affordability issue that the politicians cannot solve.
We’ve got investors lining up to invest in co-living properties. Call the Castlereach team on 0207 923 5680 and let us help you connect with them.
Live with passion
Brett Alegre-Wood