Planning matters

In recent years, London has seen a surge in Co-living, Build-to-Rent, and Purpose-Built Student Accommodation (PBSA) developments. But what exactly are these housing types, and how do they differ from traditional shared rooms in Houses in Multiple Occupation (HMOs)? In this blog, I will explore the key differences between these new urban living products and conventional HMOs, highlighting their benefits and role in London’s housing market —from offering tenants relatively affordable, high-quality living experiences, to easing pressures of the housing market and creating new development opportunities in suitable locations.

Finding good-quality accommodation to rent in London is a significant challenge for recent graduates like myself, and many young professionals starting their careers in the city. As a student studying in London, I’ve experienced the convenience and reliability that student accommodation can bring. A professional management company ensured that any issues, such as a faulty boiler or broken appliances, can be resolved promptly, often by the next day. Communal spaces like hallways, lifts, and shared amenities such as kitchens and lounges were consistently well-maintained, thanks to regular visits from professional maintenance team.

However, after graduating and moving into the private rental market, I quickly discovered that high quality management is not always guaranteed. Unlike professionally managed student housing, HMOs are not always maintained to the same high standards. For instance, a faulty boiler might take a week to be repaired. Shared spaces are often minimal because landlords convert living rooms into additional bedrooms to maximise rental income. These communal areas are frequently neglected, sometimes left untidy or unclean by other tenants, with little to no intervention from the landlord.

What I experienced was not an isolated incident. Data from the English Housing Survey (2021–2022)[1] revealed that 23% of private rental properties in England fail to meet the Decent Homes Standard. This standard requires a property to be in a reasonable state of repair, offer modern facilities, and provide a reasonable degree of thermal comfort. The situation is particularly severe in HMOs, given that landlords are often reluctant to invest in maintenance, as HMOs tend to incur higher upkeep costs by wear and tear than traditional buy-to-let properties due to a higher number of occupants. 

Living rooms in shared houses could also be converted into additional bedrooms, and in some cases, multiple occupants share a single bedroom in order to reduce their rental costs. This significantly reduces the availability of shared amenities, creating cramped and uncomfortable living conditions. An article by the Guardian[2] highlighted that as many as 11 people could be living in a four-bedroom house. Analysts estimate that there are at least 32,000 hidden large-scale HMOs across the country, underscoring the widespread nature of the problem.

Furthermore, many HMO properties are often created as a result of repurposing existing family homes, decreasing the available family homes in an area. News reports[3] have shown that in certain highly sought-after areas in London, entire streets have been converted into HMO properties, causing serious concerns among existing household residents about noise pollution, waste disposal, and insufficient parking spaces, and ultimately, leading to fewer large properties being able for families to rent or buy.

To manage and restrict the growth of low-quality HMO accommodation, many councils in London have enacted Article 4 directions, removing the permitted development rights of converting conventional housing (use class C3) into HMO housing (use class C4) under Permitted Development Rights Class L. As in London today, many boroughs have fully/partially adopted article 4 directions to restrict this conversion:

Despite the poor quality of accommodation in some HMOs, demand for these properties remains high due to their relative affordability. Data[4] from the room-rental platform SpareRoom shows that as of March 2025, an average of 3.1 individuals are competing for a room to rent in London. Some boroughs like Barnet and Kingston Upon Thames have seen 12.6 and 8.5 persons competing for a room respectively, highlighting the significant mismatch between supply and demand. This stark imbalance demonstrates that there is a significant need for good quality rented accommodation, and the restriction of HMOs through Article 4 directions cannot be the sole solution to addressing issues of low-quality and poorly managed accommodation in London. A more comprehensive, alternative approach needs to be in place to balance between the objectives of providing more housing supply, while upholding the quality and standard of housing in London. 

As the above demonstrates, there is an acute need to provide a diverse range of high quality housing options alongside HMOs in order to better meet the housing needs in the capital. Over the past decade, London has been at the forefront in the country for providing alternative urban living products, including Co-living, Purpose-Built Student Accommodation (PBSA), and Build to Rent developments. Many London boroughs are actively supporting these residential typologies, introducing broadly supportive planning policies designed to encourage their growth and guide appropriate delivery, as highlighted in our recent research and commentary on Co-living, Build to Rent and PBSA.

A key differentiator of these alternative urban living products from HMOs is that they operate under unified ownership (a planning policy requirement) and benefit from professional on-site management. This offers advantages over traditional rental properties and HMOs, including greater tenancy security and flexibility—ensuring tenants are not forced to leave on short notice, and enhanced protection against risk of crime. Importantly, these urban living products help alleviate the demand on HMOs, thereby reducing the conversion of family homes and preserving much-needed housing for families.

For developers, these urban living products present a valuable investment opportunity if they are being developed in suitable locations, especially in well-connected locations with supportive policies and Article 4 restrictions on HMO conversions, reducing the reliance of low-quality HMO accommodation in the rental market. These typologies can also contribute to the creation of mixed and balanced communities through the communal facilities that is provided, fostering social interaction, thereby enhancing the overall well-being of local residents.

As explored in Lichfields’ recently published Insight Focus, Co-living is a type of living product that provides individual rooms with a size from 18-27 square metres[5]. The development would provide a range of dedicated facilities, supplemented by a range of high quality communal facilities throughout the building which residents are encouraged to use, including large shared kitchens, various living, dining and working spaces, and often gyms, games rooms and cinema rooms. Unlike rental properties in the Private Rented sector (PRS), all units fall under a unified ownership, providing on-site professional management. These features make co-living appealing to a wide range of people from different ages, including those who are new to London and may be unfamiliar with renting in the city, people going through a change in circumstance or those looking to meet other people in a safe and managed environment as discussed below.

The rental price of Co-living units includes council tax, utilities, WiFi, and typically access to these communal facilities such as co-working spaces and gyms. When factoring in these amenities, Co-living units can be up to 20% cheaper[6] than comparable studio flats or flat shares in the same area. This makes them a cost-effective option while maintaining high-quality living standards and security.

In planning terms, Co-living developments fall under the Sui Generis use class, distinguishing them from HMOs. Within London, Co-living schemes are subject to specific planning policy requirements set out under London Plan Policy H16 (Large-scale purpose-built shared living). These include locational criteria in well-connected areas, minimum space standards, room sizes, external spaces, cycle parking, and inclusive building design.

Co-living can play a significant role in expanding housing supply in the capital. This is acknowledged by the Large-scale Purpose-built Shared Living LPG (LPBSL LPG), which equates 1.8 co-living units to 1 home[7].

Contrary to the common perception that co-living is primarily for young professionals and recent graduates, their appeal can attract a broad demographic. According to the research by Harris Associates[8], the average age of a Co-living resident is 28, with over a quarter of residents aged 35 or older. The report also identified the main attractions of Co-living schemes as the convenience of all-inclusive bills (mentioned by 47.7% of survey respondents), opportunities for social interaction (21.5% of respondents), and flexible contract terms (12.3% of respondents). As such, rather than creating a demographic imbalance, co-living supports a diverse and well-balanced population in the areas where they are built.

Moreover, Co-living developments can play a key role in addressing London’s affordable housing needs. The higher values that these schemes can attract allows for cross-subsidisation that supports the delivery of much-needed affordable homes either on site or through a payment in lieu.

It is no wonder that the development of Co-living schemes are highly regarded and supported by the GLA and the LPBSL LPG, which highlights the critical role that Co-living plays in addressing the acute housing shortage in the capital and actively supporting future developments.

Purpose-built student accommodation (PBSA) developments are designed specifically to meet the needs of students, offering a variety of communal spaces such as large shared kitchens, living and dining areas, and study spaces, where students can both work and socialise. Similar to co-living developments, PBSA falls under the Sui Generis use class and is subject to a range of planning policy requirements outlined under London Plan Policy H15 (Purpose-built student accommodation) and the PBSA LPG (October 2024). This document includes detailed guidance on location in well-connected areas, design standards, management practices, affordable housing provisions, and nomination(??) agreement requirements.

With the UK student population reaching a record 2.27 million in 2021/22[9] and is continuing to grow, increasing the availability of high-quality, high-density student accommodation is crucial. PBSA developments help alleviate pressure on the wider housing market, particularly for non-student renters, and contribute to preserving family housing by reducing the demand for HMO conversions.

The PBSA LPG supports the development of PBSA developments in appropriate locations, recognising the importance that PBSA play in providing accommodation for the needs for the rapidly growing student population and alleviating the pressure on the private rented sector and HMOs. Key points and analysis of the PBSA LPG can be found in this Lichfields’ commentary.

Build-to-Rent developments provide a large supply of rental properties within a single development, offering comparable levels of affordability to the Private Rented Sector across all household types, significantly addressing the imbalance between supply and demand in the rental market. Unlike typical Private rented sector housing, Build-to-Rent developments need to comply with the policy requirements outlined in Policy H11 (Build to Rent), which includes unified ownership and on-site professional management. Additionally, these developments often offer communal amenities, enhancing the overall living experience for residents.

Although not specifically designed as a shared living product, according to the latest research on Build to Rent by the British Property Federation (BPF), Build-to-Rent properties are more likely have attracted a higher proportion of couples and sharers, with 59% of tenants fitting this demographic compared to 41% in the private rented sector[10]. Moreover, Build-to-Rent housing is relatively more affordable, with tenants spending a lower average percentage of their gross household income on rent compared to those in the wider private rented sector, providing a more accessible and higher-quality alternative.

In my view, expanding the range of urban living options —is crucial to tackling London’s acute rental housing shortage. These types of living products can significantly increase the supply of high-quality rental homes, reducing reliance on often substandard and poorly managed HMOs. In turn, this shift allows HMOs to be reconverted into family homes, restoring them to their original purpose-built use.

In my role at Lichfields, I hope to contribute to bringing forward schemes which will genuinely contribute to easing housing pressures in the capital. Lichfields possesses extensive experience in securing permission for various types of Urban Living products in London and throughout the UK. We have been actively advising on many of London’s largest and most high profile co-living, PBSA and BtR developments, gaining unmatched expertise in the planning matters common to these urban living products in the capital. Our work has given us a strong understanding of relevant policies and the unique political dynamics of each borough.

For a more detailed analysis of Build to Rent, Co-Living, and PBSA please see our recently published Insights and commentary, and don’t hesitate to get in touch.

Footnotes

As the UK moves away from large coal and gas power-stations that had built in measures to regulate the flow of energy on to the national grid, in favour of low and zero-carbon sources that can have peaks and troughs of output, Battery Energy Storage Systems (‘BESS’) are important to ensure that the maximum amount of energy generated is utilised. The decarbonisation of the energy sector is an important part of our just transition away from carbon rich energy sources and provides environmental and economic benefits, such as clean and reliable energy at low cost to customers.

Anyone involved in the renewable energy industry will know firsthand the nature of the rapidly evolving technology and the challenges this presents for applicants and decision makers. The time elapsed from the submission of a planning application, to planning permission being granted and to construction of the development commencing can mean that the technology has moved on such that schemes need to be varied before implementation. Often the BESS ‘kit’ that has planning permission is no longer available on the market or new and improved ‘kit’ is now available.  To that end, it would be beneficial to find a consistent way of managing this that enables the control of consented development schemes without requiring new applications to deal with relatively minor but potentially still material changes to layout or the dimensions of the BESS ‘kit’.

The Scottish Government has highlighted the role of planning conditions for energy schemes by publishing their standard ‘consent conditions’ for consideration in terms of onshore wind Section 36 consents (electricity generating stations over 50MW). Within this, there is a standard condition (set out in full later in this blog) in respect of energy storage facilities associated with a wind farm and a condition for micro-siting that could be applied/adapted for BESS schemes. Lichfields believes such an approach would be suitable for planning applications relating to BESS schemes of less than 50MW granted by Planning Authorities as well as larger Section 36 consents from the Scottish Government.

From our experience working on renewable energy projects, non-material variation (‘NMV’) applications are often utilised to secure amendments to permissions when there are no appropriate conditions against which to introduce changes. However, what is considered to be a ‘non-material’ amendment will vary from council to council. Please note that there are no minor material amendment applications in Scotland. To this end, conditions that provide a degree of flexibility but also provide the local authority with control would be beneficial.

At a time when local authority planner capacity is stretched, we believe that well-crafted planning conditions can provide appropriate control and comfort to the local authority whilst still allowing the developer to account for the changing nature of BESS “kit” without the need for new applications. With this in mind, we set out the following conditions, the use of any one of them could build in necessary flexibility:

While there has been a move away from conditions which list out approved drawings as planning permissions now include schedules, a condition which lists out the approved drawings provides inbuilt flexibility as Section 42 of the Town and Country Planning (Scotland) Act 1997 (comparable to a Section 73 application in England) allows for applications for non-compliance with conditions attached to a planning permission to be made. In practice, this means that an application could be made to swap approved drawings for new drawings for an already consented development. Most importantly, a Section 42 application can consider ‘material’ changes.

Below is the proposed standard condition (10) from the Scottish Government for onshore wind farms, which we believe could be utilised widely for BESS developments.  Not all standalone BESS schemes will be EIA developments, and this condition should be amended accordingly by removing the text which is bold where EIA does not apply.  There will also be an amendment to the “Reason” in such circumstances, but this could be achieved by replacing ‘the EIA Report’ with ‘the application’ as shown below.

 

Even where details have been submitted as part of a detailed application, these are often subject to change before implementation.  This condition or a version of it would allow changes to the BESS ‘kit’ to be assessed and approved by planning authorities after detailed permission was granted, reflecting the nature of these developments.

 

We have in fact encountered a version of this condition attached to a BESS planning permission and found it to work very well. Discharge of condition applications are material considerations, and the example condition secures control for the local authority while ensuring there is flexibility for the developer should some external kit need to be altered.

 

Below is the proposed standard condition from the Scottish Government for onshore wind farms regarding micro-siting, which we believe could be amended for BESS developments. We have deleted the text that would not apply to BESS developments to leave an acceptable potential condition.

Following on from this and set out below is an adapted condition that we have seen utilised on other renewable energy projects that would do a similar job.

‘BESS containers, buildings, compounds, areas of hardstanding, the internal road network and access shall be constructed in accordance with the Approved Layout. A variation of the indicated position of any BESS Containers or other development infrastructure detailed in the Approved Layout shall be submitted to and approved in writing with the planning authority. The position will only be acceptable where it is compatible with the other conditions attached to the permission’.

These potential conditions reflect the fact that BESS developments are practical developments, often in close proximity to existing substantial pieces of infrastructure (electricity substations, pylons, etc). As such, once the principle of development has been established and assuming all other matters (e.g., visual, noise, drainage, etc.) are acceptable, variations should be acceptable within set parameters.

Flexible conditions are a more consistent and transparent way to manage potential variations to consented BESS schemes compared to NMV applications. They can also accommodate material changes. This is important as we consider it is unreasonable to expect completely new applications for minor/moderate changes just because there are no suitable conditions to do this, when the principle of development has been established. In a worst-case scenario, this could lead to a perpetual cycle of application, permission, and non-implementation due to changes to the ‘kit’.

We would encourage all applicants for planning permission to engage the local authority regarding suitable conditions. We would also encourage case officers to familiarise themselves with the day-to-day realities of BESS projects in the way this has been done for Wind Energy projects and build in flexibility to conditions even where it has not been explicitly requested. Conditions must reflect that the BESS units applied for can quickly become outdated technology and/or may not be procurable and implementable when construction is scheduled. Inevitably, there will be variations in size and the efficient siting of new ‘kit’, which would mean it does not match exactly with the consented scheme.  This should not preclude the development coming forward and should not necessarily result in the need for a new planning application.

Lichfields’ Edinburgh offices work with BESS developers all over Scotland and have an excellent track record in gaining planning permissions and collaborating with existing commissions to enable development.

If you want to discuss an energy project, please get in touch.