The UK’s build to rent (BTR) sector is entering a new phase of growth, with co-living emerging as a standout sub-sector, according to new research from Cushman & Wakefield.
The property consultancy’s latest whitepaper highlights co-living as the fastest-growing residential segment in its 2025 European Living Investor Survey, with 33% of investors already active in the space and a further 44% planning to enter by 2028.
“Co-living is rapidly emerging as a key component of the UK’s evolving BTR landscape,” says Lewis Smith, Partner, Build to Rent Funding & Development at Cushman & Wakefield.
“It offers a modern, flexible housing solution that meets the needs of a growing cohort of urban renters.”
GAINING TRACTION
With 8,730 operational co-living units – almost 7% of institutional BTR stock – the sector is gaining traction beyond its early London focus.
Major regional cities such as Manchester, Birmingham, Bristol, and Edinburgh are now seeing increased development, driven by institutional capital and growing tenant demand.
Smith points to long-term structural drivers underpinning demand, including population growth, affordability pressures, and shifting lifestyle priorities. Cushman & Wakefield estimates the UK’s target co-living market at around 640,000 people, with existing operational supply serving just 1.3% of that group.
SECOND-GENERATION STEP CHANGE
He adds that second-generation co-living schemes represent “a step change” from early models: “purpose-built, highly amenitised, and community-led.”
However, he warns that planning systems must adapt if the sector is to realise its full potential. “Unlocking co-living’s potential will require collaboration, education, and a willingness to adapt outdated planning approaches.”
GEOGRAPHIC EXPANSION
Paragon Bank’s Development Finance team echoed the report’s findings, noting a surge in BTR investment and geographic expansion.
“The volume of capital deployed already this year underscores the confidence and value investors place in BTR as a long-term, income-generating asset,” says Neal Moy, Managing Director.
Moy highlights growing interest in single-family BTR homes as another key trend.
“Build to rent is no longer just about city-centre apartments – it’s about delivering a broader mix of housing types catering to different markets.”
He also called for greater policy support to maintain momentum: “There are a number of practical interventions the government could implement – from clarifying aspects of the Building Safety Act to tightening timeframes for local authorities on planning decisions.”
