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The need to accelerate co-housing development in the UK – a cost worth co-living?

In 2016, I was lucky enough to visit Seattedamen co-housing in Denmark, the world’s first co-housing community. Started from a newspaper ad inviting people to join the project, it was a response to increasing property prices in the city.

The same property price pressure has existed around UK cities for many years yet only now are we starting to see more innovative and communal living properties. The recent cost-of-living crisis has only served to bring the need for this sort of housing into even sharper focus

The UK’s answer to Seattedamen

One such example is Hazelmead - Bridport's first cohousing neighbourhood, which not only has communal living space, but also offers affordable and sustainable eco-homes. That ticks a lot of boxes in today’s economic climate.

When looking at the design of the Hazelmead site I was struck by how closely it seems to mirror that original Danish design.

Like Saettedamen it features a common house alongside normal residential units, with kitchen and hall for social and daily dining events, as well as a communal washroom, workshop and garden. All the things that people don’t mind sharing.

Why hasn’t more co-housing been built?

Although delighted to see Hazelmead has been built (I would love to visit) it does raise the question of why there are so few such developments in the UK.

One reason is undoubtedly land and property prices, but the prioritisation of student and luxury accommodation over more affordable and later living accommodation is also key.

The costs of private renting and uncertainty about interest rates mean that more and more people are thinking about house sharing later in life and demographic trends (ageing and separation) are adding to this each year.

Cohabitas has looked at where to build and has found a discrepancy between where the best value lies for developers and landlords, and the demand for shared housing.

Where is the best place to build co-housing and co-living?

In our analysis (opens new window) we focused solely on building co-living for mature adults, as that is what we focus on and have the data for. Using this data, as well as the cost of buying a typical 3-or 4-bed house as a marker of regional cost, we can see which areas of the UK offer the best potential for developers to provide more affordable housing solutions.

The economics of shared housing get more and more attractive as the cost of living gets worse

The analysis we did not only considered average rents and property purchase prices, but also transport and amenities – in other words, the quality of life and living. Factors considered:

Transport - If you want to save money through house sharing, then it makes sense to live somewhere that has good transport links and/or where you can walk or cycle to do your shopping and socialise. We discounted any town under 25,000 people.
Cathedral – We upweighted cities with a cathedral, as we used this as an indicator of the amount of culture and amenities a place might have.
Waitrose –we included only towns that had a Waitrose. This is not to say that all private renters would shop there, only that the town would be affluent enough. Living in a better area adds value.
Rents – co-living and house shares work on a rental basis. Having 3 or 4 people paying to share a house makes the cost-of living much more affordable than living alone. Taking average rents of listed rooms for rent we calculated potential landlord income by location.
Purchase prices – We used local 3 and 4-bed house prices and then effective mortgage rates (2021) to see the cost of buying suitable properties to rent out.

London and bigger cities are becoming unaffordable

We know from our house sharing listings business that rents for shared housing are much higher in London and larger more affluent cities and towns. But we also know that the demand for house sharing to alleviate cost-of-living pressure is also much higher.

That said, our analysis showed the best opportunities for developers and landlords to generate affordable shared housing solutions appear to be outside of London and the South East.

Our top 10 most attractive towns (From some 250 towns with a Waitrose):

Chester
Canterbury
Colchester
Newark
Salisbury
Shrewsbury
Gloucester
Stroud
Nottingham
Worcester