Regional Co-Living Growth Accelerates as UK Investors Shift Focus Beyond London

The UK’s co-living sector is undergoing a significant transformation, with regional markets emerging as key growth areas. According to new research from boutique investment and debt advisory firm Excellion Capital, co-living completions outside London increased by an impressive 1,508.2% in 2024, signalling a growing appetite among investors for purpose-built, community-focused residential assets.

Distinct from traditional HMOs, co-living developments are designed with a higher standard of living in mind. These purpose-built schemes typically feature private en-suite bedrooms alongside shared amenities such as co-working spaces, gyms, and lounges. The target demographic young professionals and digital nomads are seeking flexible, high-quality accommodation that aligns with their lifestyle and work habits.

For investors, co-living offers a unique combination of premium rental income, reduced tenant turnover, and brand scalability. With rising demand in regional cities such as Manchester, Birmingham, and Bristol, the opportunity to expand portfolios in high-growth locations is becoming increasingly attractive especially compared to London’s more mature and competitive co-living market, which saw completions decline by 46.2% last year.

Lenders have also responded positively to the sector. Co-living assets benefit from strong urbanisation trends, the shift toward remote work, and increasing interest in community-based living solutions. These dynamics, coupled with professional management and design efficiencies, make co-living an appealing product for both debt providers and institutional investors.

The pipeline remains strong, with over 6,200 planning permissions granted in 2024, highlighting continued momentum across the UK. Smaller-scale investors are also well-positioned to benefit, as co-living developments range from compact urban sites to larger schemes capable of attracting institutional capital.

As Robert Sadler, Vice President of Real Estate at Excellion Capital, notes: “Co-living has evolved into a lifestyle-driven asset class. Investors are recognising the opportunity not just for strong returns, but for long-term portfolio diversification and scalable growth. This is an ideal time to engage with the sector.”