London is one of the most expensive cities in the world to live and where the average house price of £471,761 makes ownership a distant dream for some workers.
Expensive real estate means the only way many Londoners can afford to live in the capital is if they rent either a property or live in a house-share. However, an alternative way of living is growing in popularity: co-living.
What is co-living?
Co-living spaces and communal living are alternatives to traditional ways of renting and are growing in popularity as a more affordable way of living and because of a reported ‘loneliness epidemic’ that’s sweeping the nation.
Co-living developments are purpose-built, modern buildings with communal lounges, kitchens and living spaces. Designs allow for a more social way of living by promoting community engagement.
Tenants pay an all-inclusive fee that covers rent, bills, council tax and cleaning while some sites also throw in gym membership as well. The scheme is gaining attention with 18-35 year olds unable to afford huge deposits and who want to meet like-minded people.
Industry leaders are stepping up their efforts to build more apartment blocks as they expect demand to rise. Co-living start-up residential management company Society recently launched a funding campaign with the goal of attaining £500,000 to put towards the development of boutique co-living spaces.
These will come with a wealth of facilities and services, such as a concierge, gym, cafe, creche, food market, bar and much more. Their aim is to ‘tackle loneliness, create a community and provide living as a service by bringing like minded individuals together in spaces that foster social connection.’
The average house price in England is now £243,520, rising to £484,362 in the London boroughs and it is now expected that you would have to earn more than £140,000 a year in London to even set foot on the property ladder - an unattainable amount for most millennials.
'Inspiring and motivating'.
Anna Craig, 22, from Hackney Wick is currently living in a communal residence in a converted warehouse and has so far enjoyed the experience. ‘The best thing about a co-living environment is meeting new people and like-minded individuals,’ she said.
‘It’s both inspiring and motivating to surround yourself with people of similar interests.’ With house prices rising and wages stagnating it is now clearer than ever that we need an affordable substitute to high rents and mortgages.
We’re all in this together.
Anna lives with her partner Jake Stewart, 24, and said that although the sense of community was appealing, for them, the low cost was one of the main reasons for co-living.
‘I no longer have to deal with fixed contracts or estate agents and all my bills are included in the cost. Because we’re sharing, our room costs around £100 more than the others, but we get to half that amount between us!’
By 2025, two thirds of 25-34 year olds will be renting compared to 48% in 2013, so the potential market for these spaces is huge as we see the younger generation choose rentals over mortgages. However, rising numbers of tenants could lead to cost increases.
This is a concern felt amongst those living communally, with Anna confirming: ‘My biggest fear is that when people start to realise cheaper communal alternatives like ours exist, the rent will rocket. The sense of community has a big draw, but the number one reason for the popularity of these spaces is the price.’
Ease of contracts is also something that is appealing, especially for the younger generation.
A recent study by Poundland revealed that 77% of 25-34 year olds could not fix a bike puncture, 37 per cent cannot bake a cake and 39% couldn’t paint/decorate a room.
Whilst co-living spaces may not bake you a cake, Society have presented an app that will take care of many maintenance and upkeep tasks. On the app, residents can order cleaning services, report faults and even order groceries. It also compiles all your bills to one area for a fuss-free way of paying rent.
Though in Anna’s household, the cleaning is shared through a rota, they have a maintenance team who are sent by the landlords to fix any heating, plumbing or electrical faults. Rent and bills have also been streamlined into a manageable chunk.
‘When I moved into this place, I paid my first month’s rent and a deposit. This came to a fraction of what an estate agent fee would have been. The deposit is returned on exit, and you can leave whenever, there is no contract. People want convenience.’
The co-living craze could potentially mark the beginning of a new era in the way spaces are developed, bought and sold. This spells good things for the residential market and the creation of jobs within it.
Developers have already seen an opportunity for investment, with around £20bn already invested into London’s co-living market. This figure is set to rise as more of these spaces are developed. However, companies should be mindful of the reasons that residents accept an environment that, whilst presenting a sense of community, also presents a loss of boundaries.
In order for these co-living environments to become the forefront of a new way of living, the costs must be kept down to accommodate for those who choose these environments for economic reasons, or we risk stripping the younger generation of an affordable means of housing.