The UK Living sector is evolving fast. Demand is surging across Build to Rent (BTR), Purpose-Built Student Accommodation (PBSA), and co-living. Yet delivery remains stubbornly slow, constrained by regulation, planning delays, rising costs, and shifting policy.
At this year’s LD Events Property Living UK Conference, our real estate lawyers Astrid Stanley and Will Reed-Simons joined leading voices from across the industry to explore the opportunities, risks, and strategies shaping the next phase of residential real estate.
Here’s what we took away, and what it means for developers, investors, operators and planners seeking to make confident, future-proof decisions in the UK Living space.
1. The UK Living Sector Remains Investable but Not Easy
Despite political volatility and economic uncertainty, investor appetite for the UK Living sector remains strong. Compared to other global markets, the UK still offers relative value, and the fundamentals (demand, demographics, rental growth) continue to support long-term investment.
The overall picture is, however, nuanced. Viability is under pressure, with higher-for-longer interest rates, tax friction, and compliance obligations squeezing returns. Planning delays, often stretching beyond two years, are introducing risk, while the Building Safety Act (BSA) is creating new hurdles for developers at every stage of the process.
That said, the consistent message across multiple conference panels was this: if you can build now, do so. In two to three years, the scarcity of deliverable stock, especially in BTR and PBSA, could make new completions extremely attractive to both institutional buyers and end users. Many expect market conditions and regulatory burdens to ease by 2026/27, with one panellist coining the optimistic phrase: Heaven in ‘27.
2. Built To Rent (BTR): Maturing from Product to Platform
BTR is no longer just about scale – it is also about sophistication. Third-generation schemes are now responding to shifting demographics, delivering homes for not just young professionals but families, older renters and intergenerational communities. That means rethinking unit mix, amenity provision, and service models.
Several panels reflected on the UK’s ability to learn from global benchmarks, particularly the US and Germany, where vertically integrated platforms, tech-enabled management, and stronger resident engagement are driving both retention and profitability. In the UK, operational excellence is becoming a key differentiator, with investors increasingly scrutinising who is running the building, how service is delivered, and whether that aligns with underwriting assumptions.
Community-building, once seen as an ESG afterthought, is now a commercial lever. Resident-led events, local partnerships, and lifestyle-led design are helping secure planning consent, drive retention, and create value beyond the physical asset.
Regulatory changes are also opening new doors. The inclusion of intermediate rent within BTR schemes is enabling developers to pursue mixed-tenure models with stronger viability though these require careful legal structuring and local authority engagement.
3. Co-Living: At a Turning Point
Co-living is rapidly maturing but remains underserved by the planning system. The lack of a dedicated policy definition means schemes are often misclassified, creating planning friction and uncertainty. Without consistency at the local authority level, developers face uphill battles in both securing consent and structuring viable operational models.
Despite this, the fundamentals are strong. Co-living is attracting significant capital, with a user base that stretches beyond students and young professionals to those going through major life transitions, people who value flexibility, community, and shorter-term commitments. This makes the model relatively resilient to incoming rental reform and shifts in tenancy law.
Vertical integration comes with legal complexity. Operators managing their own buildings face increased exposure across employment law, consumer protection, data management, and tenancy frameworks. Legal clarity here isn’t just a box-tick it’s a core enabler of scale.
There was also a suggestion that the term “co-living” itself may be limiting the product’s wider appeal, particularly among older renters or institutional partners. A rebrand might be coming, but the opportunity is already here for those who lead with legal rigour and a clear operational strategy.
4. Purpose Built Student Accommodation (PBSA): Stable, but Facing Pressure
PBSA continues to perform well, both in terms of demand and investor interest. Student numbers are projected to rise to 2.7 million, and international enrolment is climbing, particularly in key university cities. However, delivery is not keeping pace, especially in London, where planning bottlenecks, safety regulations, and affordability issues are all slowing development.
Post-Grenfell regulation, including the Building Safety Act and its new approval gateways, has added cost and complexity, particularly for SME developers. Early legal advice is essential to navigating these hurdles and structuring schemes that can withstand future compliance pressures.
Operators are also feeling the strain. International students are booking later, demanding more flexible contracts, and expecting more service-led experiences. This requires product innovation and legal frameworks that can flex with changing occupancy and licensing models.
Meanwhile, refurbishment of older stock is emerging as a key investment strategy. With over 90% of PBSA assets now more than five years old, upgrading first-generation, low-rise portfolios can unlock affordable products and enhance long-term returns, provided the legal and technical positions align.
5. The Cross-Sector Challenge: Planning, Policy and Delivery Risk
If there was one shared frustration across the BTR, PBSA and co-living conversations, it was the state of the UK’s planning system. Delays are systemic, policies rigid, and decision-making inconsistent. There is growing support for a shift toward independent planning expertise, more flexible frameworks, and policy reform to unlock stalled development.
Design innovation was another recurring theme. Developers are moving away from ‘functional units’ toward experiential, hospitality-inspired living integrating digital connectivity, social infrastructure, and wellbeing into core design. This isn’t just about placemaking, it’s about future-proofing assets in an increasingly competitive, experience-led rental market.
Meanwhile, the adoption of modern methods of construction, climate resilience strategies, and long-term safety planning is no longer optional. Lenders, residents and insurers are all placing higher expectations on how schemes are built and maintained. Developers need to embed legal, environmental and operational thinking into schemes from day one.
Final Thoughts: The Opportunity Ahead
The UK Living sector is not without its challenges but for investors and developers who are legally prepared, operationally agile, and strategically long-term, the upside is real.
What we are seeing is a shift from delivering units to creating neighbourhoods. From reacting to regulation, to using legal strategy as a driver of value. And from isolated tenures to integrated, flexible housing ecosystems.
At Howard Kennedy, we’re helping clients navigate this shift from structuring co-living deals and negotiating BTR funding, to unlocking PBSA sites and advising on BSA compliance.
If you’d like to explore any of these themes further, please reach out to Astrid Stanley or Will Reed-Simons. They'd be happy to continue the conversation.
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