The evolution of Co-living

Co-living development is one of the hottest trends transforming UK real estate. According to Savills, as of 2023, around 6,500 co-living units are under construction in the UK. This is a serious opportunity for developers who know how to spot winning locations. 

Today’s young professionals want more than just a bed and bathroom. They’re looking for experiences, community, and flexibility and are willing to pay a premium. Smart developers are capitalising on this shift by creating spaces that blend private living areas with exceptional shared amenities. 

What is Co-Living?

Co-living is a modern way of living that offers private rooms with en-suite bathrooms, alongside shared kitchens, dining areas, and lounges. These communal spaces are designed to encourage socialising and a sense of community, while still giving residents their own private space.

It’s not the same as a flatshare, hotel, or student accommodation. Co-living is a unique option for single-person households, combining independence with the opportunity to connect with others.

The real numbers behind co-living success

While traditional residential yields hover around the 2.5-3.5% mark, well-located co-living developments consistently achieve 3.5-5% yields. The key word here is “well-located”; location will make or break the success of your development. Now, let’s explore ways to find the perfect location.

Co-Living and Policy H16

In 2021, The London Plan introduced Policy H16: Large-scale purpose-built shared living, reflecting a shift towards accommodating new ways of living. The policy outlined various requirements for co-living developments, including:

• High design quality,
• Single management operation,
• Specific spatial size standards,
• Minimum communal amenity provisions,
• A management plan,
• Affordable housing contributions.

While the policy was welcomed, developers raised concerns about its rigidity. To address this, the London Plan Guidance on Large-scale Purpose-built Shared Living was published in February 2024. This guidance clarified and refined the implementation of Policy H16, offering detailed standards for communal spaces, kitchen facilities, and outdoor areas, while introducing flexibility in design to foster high-quality living environments.

Co-Living Outside of London

While co-living developments are primarily concentrated in London, their popularity is spreading to cities like Manchester and Birmingham. Unlike London boroughs, which must follow Policy H16, councils outside the capital have the freedom to regulate co-living as they see fit.

Some councils lack specific policies on co-living, while others have developed detailed frameworks to guide its development.

Your essential Co-living site checklist

We've compiled this essential checklist for selecting a co-living site, drawing on industry best practices, planning requirements, and expert insights from leading operators. 

These criteria reflect what successful developers typically look for when evaluating potential co-living sites:

Demographics & demand 

• Young professional population within 1km: Minimum 5,000 aged 25-35 
• Average local income: £35,000+ per annum 
• Local employment growth: Minimum 2% year-on-year 
• Existing rental demand: Less than 2% vacancy rates in comparable properties

Location & transport 

• Maximum 10-minute walk to major transport hubs such as train stations, bus stops, tube lines or trams.
• Within 1km of significant employment centre 
• Minimum three major amenities within 500m (grocery, gym, restaurants) 
• Safe, well-lit street access

Technical requirements 

• Minimum site area: roughly 0.2 hectares for 100+ units 
• Standard private unit size 8 - 27 sqm
• Accessible private unit size 28 - 37 sqm
• Minimum of 4 sqm of internal communal facilities per resident (up to 100 residents). For every additional resident from 101 to 400 there needs to be 3 sqm per additional resident, and for every additional resident from 401 there needs to be 2 sqm per additional resident
• For up to 400 residents there should be a minimum of 1 sqm per resident, then for every additional resident from 401 there should be an additional 0.5 sqm.
• Minimum 0.5 sqm per resident, to include one cooking station per 15 residents
• Two dining spaces per cooking station; or number of dining spaces = 15% of total residents
• One washer and one dryer per 35 residents
• Communal areas should be well-ventilated, conveniently accessed, and designed for flexible use to foster a sense of community among residents​
• Clear site ownership 
• No restrictive covenants 
• Adequate power supply capacity 
• Fibre optic connectivity is available

Planning considerations 

• Compatible surrounding uses 
• No Article 4 directions restricting co-living 
• Outside conservation areas (preferred) 
• Recent precedent for high-density development 
• Supportive local planning policy

This checklist is neither exhaustive nor prescriptive, but hitting at least 80% of these points will likely indicate a good candidate site. Manually comparing a site against these factors would be time-consuming, so how can you speed up the process? That’s where technology and the Searchland platform come into play. 

Using data to your advantage

Successful developers no longer spend hundreds of hours manually checking site criteria; they use technology like Searchland to automate the process. 

Using Searchland's comprehensive property data layers, you can:

• Instantly overlay demographic data with transport links
• Check planning histories and constraints in seconds
• Identify ownership and contact details for off-market opportunities
• Analyse local rental markets and competition

Ready to find your next co-living site? Book a demo today by clicking here.

The regional opportunity gap

While London may dominate the co-living conversation, the real opportunities might be in regional cities. Here’s why…

Birmingham’s Tech Quarter is experiencing 15% year-on-year growth in the number of young professionals, yet it only has two major co-living schemes. 

Manchester’s MediaCity has seen a 25% increase in remote workers since 2020, creating perfect conditions for co-living developments. 

As you can see, there are huge opportunities in the regional centres outside of London from 2025 and beyond. 

Planning success strategies

Getting planning permission for a co-living development can be tricky, but many successful developments have one thing in common. They successfully demonstrate how their development will address specific local housing needs while managing potential community impacts. 

Pro tip: Use Searchland’s planning database to find similar approved schemes in your target area and see how you compare. Understanding what worked for others can significantly improve your chances of success. 

Your next steps

Ready to find your perfect co-living site? Use Searchland's powerful search tools to identify areas that meet our checklist criteria. Remember, thorough research at this stage can save you thousands later in development.

Want to see exactly how to use these tools to find your next development opportunity? Book a demo with Searchland. We'll show you how to put everything we've covered today into practice.