The housing market is being revitalised for Generation Rent, with co-living solutions which mirror the popularity of co-working spaces amongst millennials.
A report by GK Strategy suggests there has been huge growth in the luxury rental accommodation market for young professionals.
Over a four-year period, online search demand in the UK for “co-living” rental opportunities has increased by nearly 4,000% and is set to grow even more as investment into the sector accelerates.
This trend has exploded as the prospect of young people owning their own home has evaporated, with home ownership for middle earners aged 25-34 falling from 65% to just 27% in the last 20 years.
As the UK housing market continues to suffer, the luxury rental accommodation market has become a boon for investors able to capitalise on growing international demand, from those coming to live and work in the UK. Key players in the sector include The Collective, Tipi and Fizzy Living.
Currently a quarter of traffic to co-living brands websites comes from the UK, with high levels of international demand from countries such as the US where the concept is already popular.
We expect growing levels of UK-based demand as the concept becomes more established here.
Jamie Cater, GK’s Head of Policy, commented on the thriving sector: “Businesses contributing high-quality, sustainable accommodation are likely to find few political barriers in their way but will need to be conscious of the views of local stakeholders, who are keen to protect the community feel for their area.”
Young professionals are increasingly attracted by accommodation that includes all utilities, as well as onsite gyms, libraries and other facilities, in one all-inclusive package.
Some providers even offer a weekly linen change for occupants too busy to do it themselves. Successful brands have shifted from providing a traditional product to a fully-serviced experience.
GK Strategy’s chairman, Stephen Byfield, commented: “It’s ‘WeWork’ for housing and it looks set to catch on fast. So clever, so inventive, so investable.”
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