Research by Built Asset Management (BAM) has revealed a marked increase in renters scrapping single lets in favour of co-living, with a rise of 312% recorded in July and August when compared to January and February.
The data relates to people from single let properties – i.e., those inhabited independently – taking out new rental contracts within co-living properties operated by BAM across London, with the months used as a comparison between the pre-pandemic and post-pandemic co-living market.
BAM asked all prospective tenants seeking co-living accommodation for their reasons for leaving their current housing situation. According to those who left their single let accommodation between July-August, the top three reasons were as follows:
Seeking more financially viable accommodation options – 32%
Seeking co-living properties to avoid feeling of isolation – 25%
Seeking flexibility with a view to potentially purchase afterwards – 20%
In addition, the average age of tenants leaving single let accommodation in favour of co-living was 36.1 years old – eight years older than BAM’s average tenant age of 28.2 years old.
Alex Gibbs, co-founder and director of BAM, describes this trend as the ‘Covid-effect’, which shows no signs of slowing down throughout September.
He says: “Undoubtedly, changes in personal and work circumstance as a direct result of Covid-19 have led to many renters seeking a more financially-viable route in the form of shared accommodation; ultimately a more affordable option than single-lets.”
“What’s perhaps more interesting, though, is that a relatively high proportion of our new tenants have directly cited trepidation about the feeling of isolation as their main reason for exiting the single-let market. The negative impact of lockdown on mental health appears to have had a direct effect on rental behaviour.”
Gibbs continues: “It is also interesting to note that one in five new tenants have cited increased flexibility as a key reason for selecting this type of accommodation, with a medium-term plan to purchase a property rather than to continue renting.”
“We will want more data in order to make stronger inferences here, however, initial signs suggest that the lockdown and the wider pandemic have caused Londoners to re-evaluate their priorities and potentially their attitudes towards renting in the long term,” he concludes.