Co-Living: London's New Tenure
From student accommodation to purpose-built co-living, a new asset class is reshaping how young Londoners live — and how planners respond to it
Co-living — purpose-built, amenity-rich, all-inclusive rental rooms, typically in clusters of 200-600 — has emerged from the fringes to become a mainstream planning application type. The Planning London Datahub now tracks over 80 co-living schemes in the pipeline, with a cumulative 24,000 rooms. But policy is lagging the market.
Defining the Asset Class
Co-living sits between conventional Build-to-Rent (self-contained flats) and purpose-built student accommodation (PBSA). Units are typically between 18-25sqm — below London Plan habitable room standards for conventional dwellings — but schemes compensate with substantial communal amenity: co-working, dining, wellness, events programming. The all-inclusive rent model (utilities, wifi, cleaning, community events) appeals to young professionals priced out of self-contained BTR. Operators include Chapter, Gravity Co., and The Collective.
The Planning Policy Gap
Co-living does not fit neatly into the Use Class Order. It is typically consented as sui generis — outside the standard residential use class — which creates a significant planning consequence: it is not subject to the housing policies (minimum unit sizes, affordable housing requirements, mix) that apply to conventional C3 residential. Most borough policies either have no co-living policy at all, or apply policies developed for PBSA that do not fully address the co-living model.
“Co-living is solving a real housing need for young professionals. The risk is that the planning system, by classifying it as sui generis, exempts it from the policy requirements that would make it genuinely affordable.”
— GLA Housing Policy Team, emerging policy consultation, 2024
The Affordable Housing Question
Because co-living is not classified as conventional residential, the 35% affordable housing requirement does not straightforwardly apply. In practice, this means that most co-living schemes in London provide no affordable housing — the accommodation is priced at market rates, typically £1,400-£2,200 per month all-inclusive in central London. The GLA has begun to push back on this, requiring that major co-living applications demonstrate an approach to affordability. But without a consistent policy framework, the outcome varies case by case.
Demand Drivers and Location Logic
The spatial distribution of co-living applications reflects its occupier profile. Zone 1/2 locations with excellent transport links — Southwark, Hackney, Tower Hamlets — account for 38% of the pipeline. Secondary clusters have formed in Zones 3-4 at Elizabeth line and Overground hubs, where lower land costs allow more competitive rents. University proximity is a weaker locational driver for co-living than for PBSA — the target market is young professionals, not students, and the catchment logic is employment-led rather than campus-proximity.
Policy Recommendations Emerging from the Data
- 1Classification: consider C4 co-living use class or formal sui generis definition to enable consistent policy application
- 2Minimum size: establish a lower minimum room size for co-living (e.g. 20m²) with corresponding amenity requirements
- 3Affordability: apply a proportion (e.g. 20%) of rooms at London Living Rent equivalent
- 4Covenant: require long-term co-living covenant to prevent conversion to conventional BTR
- 5Mix: set a maximum proportion of a borough's pipeline that can be co-living, to protect conventional housing supply