New research has revealed a surprising increase in the average age of house-sharing renters in London. And it’s a reflection of today’s growing rental market trends.
Co-living is an increasingly popular way to rent for today’s young people. In modern terms, co-living accommodation normally involves groups of people living in a purpose-built space with shared facilities and communal areas. It often attracts city-dwelling young professionals, and it has become even more common with the rise of urbanisation.
Property management company Built Asset Management’s latest research has found that the average age of co-living tenants is now 28.2 years. This is an increase of five years compared to its findings in 2017. Then, the average age was 23.9 years, which seems closer to the age you would once have associated with ‘Generation Rent‘.
The research shows how things are changing in the UK housing industry, and in the rental market. What’s more, people are also staying put for longer. The data shows that people stay in co-living situations for an average 18.3 months now. This is a more than 50% rise compared to 12.1 months in 2017.
The research only focused on London data. However, trends seen in the capital tend to be reflected across the UK’s other major cities.
A spokesperson from Built Asset Management said: “The data really reflects the ever-increasing popularity of co-living as an attractive housing option for renters across the capital, with this form of accommodation attracting an increasingly senior and discerning demographic of professionals.”
“Co-living is fast catching up with the single let market as an option for older professionals in increasingly upmarket professions; no doubt a reaction to the huge rise in quality and variety of co-living properties now on offer.”
As tenants get older, in many cases, their spending power increases. Along with this, so do their expectations from their rental accommodation. Renters are now often looking for a place that has added amenities and luxuries, better facilities and a sense of community.
Co-living in urban areas
Across the world, the number of people choosing to live in urban areas is growing. While this is more prominent in emerging markets, according to Invesco Real Estate, urban growth rates are increasing across Europe, too.
By 2030, it predicts 60% of the world’s population will be living in cities. This is a rise of 1.2 billion people between 2015 and 2030.
Because of this, pressure and demand on housing in cities is growing. For younger occupants, this has pushed prices up in some areas. While in the UK, cities outside London tend to be significantly more affordable, many will still be looking for ways of saving money.
Co-living is therefore a popular option, as sharing facilities with others can make things cheaper than living alone. The quality of such rental accommodation has hugely increased as developers have placed more focus on this sector.
Why renters choose to share
A report published by Invesco titled “A case for co-living” looks in more detail at the reasons behind the growing trend. It writes: “Co-living offers many would-be renters a way to gain entry into the institutional marketplace while simultaneously saving money in aggregate.
“Take, for example, a traditional studio apartment compared to a room in a co-living facility in London. While on a rent per-private-square-foot basis co-living spaces are more expensive than traditional units, the savings potential is enhanced via greater space and service efficiencies.”
Building rental communities
Community is often just as important to renters as it is to homeowners. Particularly as the average age of home-sharing renters grows, this is likely to increase as people get older. Young professionals may be buying property in later in life, but their needs are the same.
For many developers of build-to-rent projects, community is a key focus. Part of the value of such properties comes from advertising access to shared spaces and communal areas. Cinema screens, breakout areas, workout areas and gyms, communal gardens and more all add to this. Arguably, the target tenant may choose co-living because they want the to be social.
For property investors, co-living and build-to-rent opportunities could be something to look into. The demographic of people who rent today is very different to what it once was. You can no longer just aim your properties at the youngest generations. Now, it is late 20s, 30s and even older who make up a big portion of the market.
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