There is no doubt that London is facing an intensifying housing crisis. The delivery of enough homes to meet the capital’s growing population while remedying a backlog of unmet need is becoming ever more challenging. Alongside the housing crisis, the way people live and work continues to rapidly evolve.
There are many factors at play underpinning the burgeoning housing crisis and informing the changes to Londoners living and working arrangements. These include the ability to build enough homes to meet demand, increased remote working opportunities, changing household dynamics, rising levels of loneliness and the cost of living crisis. All of these factors are changing the ways people live in one of the most expensive cities in the world.
In this context, the co-living sector has emerged as an increasingly popular option. There has been a significant increase in the demand for co-living units amongst occupiers and, in turn, a growing appetite for co-living development from developers, operators and investors.
There remains though, considerable undersupply of good quality co-living accommodation in London. The BPF report on co-living identified that, as of September 2023, there was a 48% shortfall in the number of co-living units to rent compared with demand. There is also a growing pipeline of c.12,000 co-living units in London at the planning stage; suggesting a planning system which is becoming more aware of the role co-living can play in meeting acute housing need while accommodating lifestyle and household changes.
Lichfields' view is that the co-living sector in London presents a significant opportunity for growth in an otherwise flatlining housing market.
Planning, of course, has a critical role to play in supporting the delivery of new co-living developments in London. The purpose of this Insight Focus is to explore the opportunities presented by co-living in London; assess the patterns of co-living development in the capital; and, identify the common planning challenges faced by these developments as well as potential planning solutions.
This Insight Focus explores the Use Class, London’s planning policy on co-living, and common myths. It reviews LPA support levels, trends in co-living applications by location, scale, and form, and outlines typical issues faced in applications, along with strategies to overcome them.
Image Credit: Folk at The Palm House, Halcyon Development Partners
