Coliving in 2024: What’s Next for This Major Real Estate Segment?

Last year, we explored why the coliving market became mainstream as a major real estate segment. A year on – the coliving industry is stronger than ever, despite recent shifts in the market. Let’s dive into what’s happening in the coliving market in 2024.

Housing-as-a-service

Two major trends currently define the UK coliving industry – housing affordability, and regional markets (according to a recent Savills report). In fact, coliving emerged in response to a crippling housing crisis in San Francisco (the world’s tech capital) in 2004. Twenty years on, the continuing rise of coliving comes at another crisis point – it’s currently the most expensive time to be a first-time buyer in the UK in the last 70 years.

Soaring house prices and interest rates are pricing people out of the market. The rental market is no better either – with diminishing stock and poor quality housing. Paul Broadhead, head of mortgage and housing policy at BSA, says: “New thinking and radical changes are needed.” That’s where coliving comes in.

We’re all leaning into the shared economy – with brands like Uber and Netflix normalising shared car journeys and television subscriptions. Likewise, coliving has evolved into housing-as-a-service, with fully-furnished apartments and monthly bills included. Shared amenities, ranging from outdoor spaces (like rooftops and gardens) to leisure facilities (like fully-fitted gyms and yoga studios), cinema rooms, and shared kitchens make coliving desirable over traditional rentals that come with their share of landlords committing foul play.

Coliving in the regions

Thanks to widespread post-pandemic flexible working practices, the UK regions can better support the workforce, with corporations setting up shop in satellite offices and local coworking spaces. Growth of the regional coliving market is a byproduct, but historically, it’s been nothing short of contentious. Last time, we noted Leeds City Council rejecting a coliving scheme in April 2023 due to “obscene” prices (ranging between £800 to £1,200 a month per unit). Nonetheless, a 78-unit coliving development in Leeds’ former Grade II listed Burley Library was approved a few months ago.

Similar concerns around regulations and costs were once raised in Manchester. But, the UK’s second city is expected to have at least 4,700 coliving units by the end of 2024 alone. Like Leeds, Manchester is a major university town. With the typical coliving resident aged between 18-40 years old, the model is seemingly attractive to retaining talent in university towns.

In fact, coliving often crosses over with PBSA (Purpose Built Student Accommodation) as a real estate segment. They each boast private rooms with en-suites, communal kitchens, and living spaces (in typical coliving units, but not all). For example, by offering stays during the summer months, Yugo student accommodation widens its customer base to non-students, maximising returns in traditionally vacant periods. Yugo operates across the UK and Ireland’s regional cities, and in Spain.

Community is King

Whether ‘colivers’ stay for a week, a month, or a year, the focus is clear – community is the essence of coliving. That’s why coliving was synonymous with digital nomads, giving them a place not only to stay but to meet people. There’s still a growing coliving market for nomads – there are over 17 million digital nomads in the US, increasing by 131% since 2019.

Nonetheless, there are still operators coming in with aggressive growth strategies. In 2021, for instance, one of the UK’s largest operators fell into administration after residents left in droves during lockdowns. A large US operator declared bankruptcy just in the last few weeks. Like WeWork’s notorious fall from grace, operators who apply a real-estate-first approach, rather than a community-first approach, are more likely to crash and burn.

Meanwhile, the operators who not only survived the pandemic, but thrived, chose slower and more sustainable approaches. For example, Gravity Co-Living built a community before even opening its first space in 2019. Equally, Casa Netural, a Nexudus customer and independent rural coliving hub in the historic Italian city of Matera, was lovingly created by a husband and wife team who whole-heartedly believe in the power of “co.”

The wellness project

Casa Netural exists as more than just a community space. It was co-created by its community, and is associated with several initiatives that prioritise human connection, like nature walks holding anthropological significance and social enterprise projects in nearby locations reactivating local economies through co-design processes. The hub itself is also more than just a coliving space – it’s a coworking space too.

In fact, coworking is now a must-have alongside the coliving offering. Jermaine Brown, co-founder at Re:shape Living, ARK Co-Living, and the Second-Generational Shared Living Consortium, says: “Coworking spaces and access to outdoor amenity spaces are crucial offerings for today’s coliving members.” A coliving development with a coworking space open to the public widens its customer base, integrating locals with coliving residents. It’s activated by social events, like hosting wine tasting evenings or music events, and even having an F&B offering, like a cafe, in the space too.

A mixed-use community space can do wonders for people’s well-being. In our last piece, we touched on how coliving mitigates loneliness. Leah Ziliak, The Coliving Consultant, explains how “social isolation increases a person’s risk of premature death in staggering ways…a person who is socially isolated also has a 50% increased risk of dementia.” Indeed, Savills suggests that part of the attraction is down to being an alternative to living alone.

The ‘E’ and the ‘S’ of ESG

Together is better, after all. For instance, 71% of coliving residents in UK coliving space – The Collective – “felt that living in a shared community has improved their social life.” Encompassing the ‘S’ of ESG, it’s something that the real estate market as a whole is more committed to.

Making up the ‘E’ – the environment – is how coliving brings around a sense of sharing space and resources, drawing in a market committed to reducing its environmental footprint. The impact is pretty staggering – Dr. Penny Clark explains that ‘compared to single-family homes, coliving developments can reduce carbon emissions by 32%,’ thanks to sharing appliances, like fridges, washing machines, and ovens. Communal kitchens encourage residents to cook and eat together. They might even share tools or cars, although this is more viable in co-housing models (a more self-organised version of coliving).

As we discovered last year, coliving is responding to rapid urbanisation patterns that might see 9% of the global population living in megacities by 2031, putting a huge strain on our planet’s resources. By “creating shared communal spaces and smaller private spaces reduced urban space,” coliving enables more people to live centrally in cities and reduces overall environmental impact.

The coliving boom continues

The strength of the coliving market lies not just in its ability to adapt but in its transformative potential to address some of the most pressing challenges of our time. From overcoming the loneliness epidemic to solving the housing crisis – there are many reasons to embrace the coliving way of life. Will we see the movement grow even further over the next few years? It’s difficult to tell but coliving seemingly has its benefits, not only in a shared living model, but to bring more intentionality, community, and connection into our lives.