Co-living – typically studio-style living space with each occupant having a private en-suite bedroom but sharing amenities such as a kitchen/dining area as part of a larger scheme with shared facilities for working, fitness and socialising - has been identified in other countries as being ideal for a wide range of groups. These include young professionals and those relocating for a new job, studying for a degree, working remotely, starting a new company, or getting to know a new city.
As well as offering an alternative housing option, new co-living schemes can have a positive environmental impact, not just from being built to high eco-standards but also because they allow occupants to share resources and reduce waste.
However, while popular in London and many parts of Europe where co-living is seen as affordable and convenient, it has (with one or two exceptions) yet to really take off in Scotland.
In November 2023, Glasgow City Council consulted on its draft Large Scale Co-Living Planning Guidance as part of the City Development Plan. It contemplates co-living developments being located around the city centre and comprising complexes of 50 plus bedrooms, consisting of private individual studios and cluster flats combined with communal spaces and facilities under a single management company that runs the scheme on behalf of the residents.
The consultation references flexible tenancies but proposes a restriction on tenancies of less than six months to stop co-living schemes being used for holiday lets or temporary hostel accommodation. There is also a question of whether the market-standard private residential tenancy will be fit for purpose to provide landlords and tenants with “flexible tenancies”.
The consultation period ended last week and it will be interesting to see the outcome in due course. Either way, there is a chance now for the government and local councils to shape the future of co-living in Scotland to make it attractive to investors and developers while helping provide Scotland with a new source of quality rented accommodation. If the regulatory balance is right, investors may see a good opportunity to build a portfolio in Scotland.
We’ve already seen the rise of purpose-built student accommodation (PBSA) in Scotland which, along with meeting student demand, has seen a rise in the safety and quality of student accommodation.
If the regulatory framework is flexible enough then the private sector will be encouraged to take on scale developments, helping to alleviate the housing shortage while at the same time increasing the quality of housing stock. The co-living segment of the sector can provide schemes with additional amenities to attract young professionals, which helps expand and maintain the talent pool needed to grow the economy and provide wider benefits for the city.
Local authorities and central government may not have the resources to fix the housing shortages in the short term, but they can create an environment that allows private capital to play a strong part in the solution.
Our multi-disciplinary team is experienced across all living sector asset classes. If you need any advice on the legal and regulatory landscape affecting the living sector, or would like to discuss further, please get in touch with James Jack or Peter Chambers.
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