UK Build-to-Rent Marketbeat Reports

For the data behind the commentary, download the full Q1 2025 UK Build-to-Rent Report.

CO-LIVING GAINING MOMENTUM

Co-living is rapidly emerging as a key component of the UK’s evolving BTR landscape, offering a modern, flexible housing solution that meets the needs of a growing cohort of urban renters. With 8,730 operational units now in place, equivalent to nearly 7% of institutional BTR stock, co-living has moved beyond the fringes of the rental market and is beginning to scale. Much like the early evolution of the UK’s multifamily sector, development to date has been concentrated in London, but strong momentum is building across major regional cities.

Institutional capital is driving this next phase of growth. Our 2025 European Living Investor Survey highlights co-living as the fastest-growing residential segment: 33% of respondents have already invested, and a further 44% plan to do so by 2028. This reflects the increasing appeal of co-living as a route to diversifying portfolios—both by asset typology and tenant profile within a BTR strategy.

The underlying demand drivers remain compelling. The persistent imbalance between housing supply and demand in urban areas, coupled with population growth, shrinking household sizes, and shifting lifestyle priorities, continues to underpin long-term rental demand. Affordability pressures are forcing many potential first-time buyers to delay homeownership, extending their time in rental accommodation. We estimate the target market for co-living in the UK to be around 640,000. Nearly half of this group resides in London, with significant concentrations in Manchester, Edinburgh, Birmingham, and Bristol. With operational supply currently meeting just 1.3% of this market, the opportunity for growth is significant.

As the sector matures, co-living is entering a new chapter of development and design. Today’s second-generation co-living schemes are a step change from early iterations: purpose-built, highly amenitised, and community-led. Co-living has the potential to deliver scale and diversity across the UK’s rental market. Its success hinges not only on investor appetite and tenant demand, but also on planning systems that understand and support its role. As the sector matures, the imperative is clear: policy must catch up with the market. Unlocking co-living’s full potential will require collaboration, education, and a willingness to adapt outdated planning approaches to meet the housing challenges of a new generation.