The housing emergencies declared in Edinburgh and Glasgow reflect longstanding and deep-rooted pressures affecting the market and wider system.
The issue boils down to the symbiotic issues of affordability and availability. Put simply, there aren’t enough homes to meet demand. It’s easier said than done, but the way only way to address the problem is to sharply increase the supply of quality homes across the full range of types and tenures.
One sector that has significant potential to increase the number of homes available and allow for changing preferences is co-living.
Typically, co-living developments comprise studio-style living space with each occupant having a private ensuite bedroom and access to communal living and kitchen/dining areas and other shared facilities for working, fitness and socialising. Think halls of residence but much more premium and with additional amenities.
Co-living developments are growing increasingly popular in London, across Europe and in the US due to many people being priced out of being able to buy and soaring demand for rental accommodation - the same issues we are seeing in Scotland’s major cities.
These developments are ideal for young professionals, particularly those who might have relocated for a new job or to study, as they not only offer conveniently located, high-quality accommodation but flexibility and a ready-made community too.
They’re also positive from a sustainability perspective since they are often newer buildings with high eco-standards and the model allows occupants to share resources and reduce waste.
However, despite the considerable benefits these developments offer, they are yet to take off in Scotland.
In November 2023, Glasgow City Council did launch a consultation on its large-scale co-living planning guidance as part of the city’s development plan, which envisaged co-living complexes of 50-plus units. The draft guidance references flexible tenancy agreements but proposes a restriction on tenancies of less than six months to stop co-living schemes being used for short-term lets or temporary hostel accommodation.
The Scottish Government and local authorities should grasp the opportunity to shape the future of co-living in Scotland and harness it for the considerable benefits it could bring. As well as increasing the supply of quality rented accommodation, the appeal of co-living developments could play a major role in attracting the talent needed to grow the economy.
Much hinges on the policy landscape. The housing emergency can only be tackled with the involvement of the private sector. If the regulatory balance is right, and developers are provided with clear guidance, investors will see an opportunity to build and grow portfolios, delivering much-needed accommodation.
We’ve already seen the growth of purpose-built student accommodation which, along with helping to meet demand in an underserved sector, has seen increased safety and quality of student housing.
Co-living could do the same for young professionals, meeting a growing gap in the market at a time when there are considerable pressures on the traditional private rented sector.
James Jack is a director at Burness Paull LLP
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