The growth of student and co-living schemes in London

Given the viability challenges of bringing forward traditional 'private for sale' housing due to increasing build costs and softening new build values due to supressed demand, some developers have looked towards student and co-living schemes as being more viable. Demand outweighs supply in both these sectors. 

In terms of housing delivery, national guidance stipulates that student housing is accounted for with a ratio of 2.5:1. (i.e. every 2.5 PBSA beds is equivalent to 1 home). Co-living has a ratio of 1.8:1. The chart below takes these ratios into account.

Both the PBSA and co-living pipelines have grown considerably over the past few years. Nearly 20,000 PBSA beds and 7,500 co-living units were submitted across the capital in 2024 alone. Between 2022 and 2024, there were 14,000 PBSA beds and 3,900 co-living units submitted for planning per year on average. This was equal to 5,500 and 2,100 as per their equivalent ratios, respectively, equal to 24% of the total (taking into account private sale and build-to-rent (BTR)). The equivalent figure for the period between 2014 and 2019 was just 4%. 

A question of supply and demand

This jump is down to the continued supply and demand imbalance of these tenures, improving viability for developers with increasing rents and a swelling in popularity from occupiers. While PBSA and co-living caters for a specific audience, the increased supply benefits the entire market by freeing up capacity in the wider private rented sector (PRS).

The start of a new development cycle?

With interest rates falling and build costs softening and more predictable, it is hoped we are now starting to enter a new development cycle. Equally, with confidence and a bit more certainty entering the wider market with stable government and policy, will we start to see an uptick in both the private sale and BTR markets from a planning point of view?

Further information

Contact Paul Wellman or Lizzie Beagley