• Matt Baker

5 Common Misconceptions About Co-Living

Those of you who read my content regularly know that the biggest question people have about co-living is simply: “What is co-living?” The word is so widely misunderstood and misinterpreted that even some of those operating in this sector are not entirely sure.

To provide clarity, let’s shine a light on the 5 top misconceptions surrounding co-living and the development of these properties:

1. Co-living only pertains to large properties

The Greater London Planning Authority, within the draft London Plan, intends to adopt the UK’s first co-living-specific planning policy. In it, they refer only to developments where 50 or more units where people share, suggesting that anything less than 50 units is nothing more than a large HMO.

So, if you develop a property with 50 or more units, then you are no longer governed by HMO planning policy. I prefer to call these larger developments “serviced co-living”, because it is akin to living full-time in a hotel.

Why does this distinction matter? Smaller properties have HMO planning policies that restrict the number of HMOs in an area, whereas the co-living policy does not. This new policy also focusses on the management side of the development, with the submission of management plans being required. This begs the question why this policy for a larger number of occupants should be any different to a smaller dwelling where people share. Surely, the focus of shared houses should always be on how they are managed, regardless of size.

As I discuss further on, co-living is about community, and it is just as easy, or perhaps easier, to instil community within a smaller, more homely property, or what I like to call a co-home.

2. Co-living is just fancy name for HMOs

No, no and no! This is a very common misconception and one that I am asked about most often. An HMO is a technical definition defined under Housing Act 2004 – an HMO is the property. Co-living, on the other hand, is the community – the wrapper – that envelops the property and makes it work well. That sense of community encourages tenants successfully to stay in the property longer because it provides a much better, more enjoyable and supportive experience whilst living there. Community can naturally form, but the best co-living operators are those who facilitate the forming of a community. I’ve written an entire article on this topic, so head over for more information.

3. It's all about design

Some very good-looking HMO properties have been featured on Facebook, Instagram and other social media platforms. At Scott Baker Properties, we do this as well, to showcase the standard of accommodation we provide. However, this is only one of the three requirements to qualify as co-living. Co-living works when you have quality space, quality design and, most importantly, quality service. In fact, design is the least important of these. Why? Because a well-designed, but badly managed property generates as many issues as a poorly designed “beige box” HMO.

4. Co-living doesn't work everywhere

Humans are naturally social animals – we thrive when we’re around others and when we feel part of something larger than ourselves. So, co-living works wherever people share properties – which is everywhere in the world. Granted each area has its own market, its own demographic and its own levels of supply and demand, but if you have a real insight into this data, then creating co-living properties is simply a matter of fulfilling a need.

The UK Government has stated that co-living is sorely needed to help address the national housing crisis.

So, instead of assuming that it won't work everywhere, if you do the research, the due diligence on your customer, the tenant, you'll become an expert in providing what co-living housing solutions are needed, and where.

5. Co-living is new in 2020

You may think that co-living is a brand-new thing. Quite the contrary. Co-living has been around for decades. An article I highly recommend, by Gui Perdrix and Matt Lesniak, is “Co-Living 3.0 - what does the future of coliving look like?”.

This article examines the evolution of co-living through phases 1.0, 2.0 and 3.0. Given that two thought leaders in the co-living world see that we’re at version 3.0 just goes to show that we are far from experiencing a revolution in shared housing – more of an evolution.

This evolution can be seen as developing from the beginning of this century, co-living 1.0 being the noughties (2000–2009) and co-living 2.0 rearing its head in the teenies (2010–2019). This decade, the 2020s, is where the evolution into co-living 3.0 will take place.

I concur with Gui and Matt that co-living will become more widespread as a conscious choice, a preference, for tenants, rather than one of settling for a financially driven last resort. I believe this will be led by the co-home model, where co-living is seen more as a home by housemates versus a feature of the nomadic lifestyle seen and arguably encouraged through the larger serviced co-living approach. Smaller, homelier properties will shine through as a strong contender for housemates, young and old.


Clarity in marketing is key. Everyone will have their own flavour to their co-living offering, but be clear in what it is that you offer and in who you offer it to. Be open in your interpretation of what co-living is, but remember that the people who will judge you the most on whether you are successful as a co-living investor, developer or operator are your customers – the tenants, members, housemates. It is the experience that you deliver by way of a great space, a great design and, fundamentally, your great service.


Matt Baker is the #1 Best Selling Author behind 'Next Level Landlord' and the co-founder of Scott Baker Properties and The HMO Platform.