While many investors may be unsure of the differences between co-living and Houses of Multiple Occupation (HMOs), there are a wide range of differences between both of these residential offerings that entirely separate them from one another.
HMO properties – typically 3+ bedroom homes – have an entirely communal living experience as residents are essentially cohabiting with their housemates, complete with a group tenancy agreement, and the only privacy available for tenants are their bedrooms. This, however, contrasts greatly with the co-living sector, which is defined by its compact, single occupancy apartments in a purpose-built development, with a wide range of communal amenities available to be used as an extension of a resident’s own home and promote a sense of community, but that do not replace the essential privacy essentials necessary for living, such as a living room, kitchen, or bathroom.
To compare the benefits of co-living and HMOs, we have outlined three ways that co-living differs to HMOs.
HMOs have been around for over 100 years with little to no investment or interest in evolving to suit the rental market’s needs or demands. A typical HMO property will be a traditional family home, often comprising of three or more bedrooms, and a kitchen, living room, and bathroom. This type of property was not built with the intention of it to be shared with more than one household, therefore, there is no infrastructure in these buildings that offer its residents privacy when going about their daily activities, unless they are in their own bedrooms. Residents are expected to share the facilities such as the kitchen and the bathroom, and all of the appliances in these spaces, which can be stressful for a tenant cohabiting with others they may or may not know.
Co-living developments, however, are purpose-built to provide private, single occupancy apartments in a building centred around embracing community, that offers residents privacy and independence from their neighbours but with the option for them to use the amenities and communal facilities as an extension of their own home when they choose to do so. Residents in a co-living development have access to their own private bathroom, kitchen, and living space as well as their bedroom, with the added benefit of access to amenities on site that can increase their quality of life and social experience with their neighbours, without having to wait until their neighbour has finished cooking to eat or waiting until their neighbour has showered to brush their teeth.
While some HMOs can come partly furnished, it is not common for an HMO to have all of the furniture necessary for its residents to live comfortably – and any furniture that does come with the property is very often well-used, old, and not high quality. Not only is the furniture typically of average quality, but the furnishings and decoration of the home will often be plain white or magnolia walls, with average appliances, an energy inefficient gas cooker, and decades old carpets. With more young people choosing to rent for the long-term instead of opting for the generational expectation of purchasing a home, the UK rental market is no longer satisfied with average quality homes that provide no incentive to live there, such as on-site amenities or events, and are instead creating exceptional demand for high-quality, luxury homes.
In contrast, apartments in co-living developments come fully furnished with high quality, bespoke furnishings such as Italian leather sofas and solid Amtico flooring alongside high-end integrated appliances and with energy efficient technologies throughout. The communal areas are also well furnished, highly decorated, and managed 24/7 by on-site dedicated teams that maintain the cleanliness and organisation of the on-site kitchens, workspaces, and more – making living in a co-living development as easy, hassle-free, and luxurious for residents as possible.
As HMOs are simply a converted traditional family home not intended to be shared by multiple households, there is just one kitchen, one living room, often one bathroom, and the bedrooms in the property. This means that residents only have these limited shared facilities in which to relax, socialise, have friends over, and enjoy alongside their housemates, likely with access to just a television.
The co-living sector, however, is specifically designed to provide a sense of community amongst its residents, delivering this by offering unlimited access to a wide range of on-site amenities for residents to use as an extension of their own home, in addition to their own private spaces. These amenity spaces can include co-workspaces, large commercial-sized kitchens, gyms and fitness studios, resident lounges, games rooms, cinema rooms, and more, all designed to allow the hosting of community-led events held and organised by the dedicated on-site community manager to bring the residents together and uniting them under one roof.
With the number of young people eager to become ‘lifestyle renters’ and with more people searching for an exclusive living experience that offers them the opportunity to live in a private, self-contained luxury apartment and enjoy the benefits of not only a united community within their building, but also access the on-site amenities on their own time, the demand for co-living properties in the UK rental market is continuing to grow exponentially.
To learn more about the benefits of investing in the co-living sector, get in touch with one of our expert property consultants today.