In my last article, I talked about Housing 2.0, Ted Hayes and the tiny home movement in the USA and about how we in the UK can take inspiration from afar when it comes to the design of homes in Britain. Shared-living has been a common way of existence in America for decades. The concept has evolved somewhat over the years and during my trip to California and New York I visited some highly innovative examples of this model in practice.
Buy-To-Let in 2017
In 2017, Buy-to-let landlords are facing a lot of challenges.
Tax changes, new stamp duty rules and a tightening of mortgage availability may see the profits of investors and landlords diminish as these changes come into force.
For many property investors in London and the South East, the numbers simply do not add up for ‘vanilla’ or conventional buy-to-let anymore.
Many are looking at alternative strategies, such as the shared-living, shared-housing or the HMO (house in multiple occupation) model.
My practical research work has previously explored the creation of harmonious co-living spaces for those who needed rapid, affordable housing that some in the UK saw as radical at the time.
Now, however, shared-living is very much front-and-centre in the conversation that is going on between investors in the UK housing market.
But first, an example from New York.
Castle Braid Co, Bushwick, Brooklyn, New York
Castle Braid co. is a unique community living space hosted within a 125-apartment complex in Brooklyn, New York.
Described by its owners as a ‘vision of interplay between the individual and the vibrant community they’ve helped to create’, Castle Braid is a free-space which is continually and creatively evolving.
The New York Post chose the building – home to artists, intellectuals, entrepreneurs and inventors – as one of the five most interesting residential sites in New York.
The developer, Mayer Schwartz, says his aim was to establish an “organically-growing group of young professionals in the creative areas“— by having them live together, sharing their skills and pooling their talents.
This ethos allows people of a similar nature to not just co-share; but to socialise, work and ultimately, create a community together.
This one-of-kind building project is a stunning visual example of innovation in design for the formation of a creative community living complex; one which is executed with a unique sense of haphazard precision and flare.
The Amenities at Castle Braid
The amenities at Castle Braid include a gym, library, screening room, games room and 6,000-square-foot courtyard, barbeque area and attached dog park. This helps connect the residence – an aim of Castle Braid which has remarkable success.
Residents decorate the space and Mr Schwartz has been known to reward residents with periods of free rent in exchange for their artistic services.
During my stay, I learnt that a sculptor received six months of no-payment, living in return for his creation of Castle Braid’s custom-made iron gate.
Shared-Living in the UK
In the UK, the concept of HMOs arose from the Housing Act 1985, which first defined an HMO as ‘a house which is occupied by persons who do not form a single household’.
Co-sharing in Britain – ‘intentional communities of both private and shared space’ – started to evolve at the end of the 1990s.
The movement is gradually building momentum as people explore new ways of economical living; according to UK Cohousing, there are now 19 built cohousing communities in Great Britain and a further 60 developing projects, with new groups forming all the time.
Lancaster CoHousing
One example of this is Lancaster Co-Housing, a multi-award winning eco co-housing community consisting of private homes, shared facilities, workshops, offices, studios and outdoor space.
There are around 65 adults and 15 children live at the site; they eat some meals together, make decisions by consensus and enjoy socialising together in specially created common areas.
The cosy and comfortable home benefit from renewable technologies and residents live a lower impact lifestyle in many ways: through a travel plan and car club, cooperative food store and by sharing and swapping resources.
Photos used with permission of Lancaster Cohousing – http://www.lancastercohousing.org.uk
Being Part Of A Community
The benefits of belonging to a community with positive focus and spending leisure time productively are too important to ignore.
Those who reside in semi-shared space can save money, divide chores, enjoy group activities, form lasting friendships – and ultimately provide a unique and invaluable source of support to each other through day-to-day life.
Investing In Shared-Living
For investors who are looking at long-term strategies, the co-living model is a way to maximise space and ultimately, financial return.
If you are thinking of investing in a shared-living model, whether that’s creating a city-centre HMO aimed at tech start-up entrepreneurs, or an affordable complex of units which will be leased to a local authority, here are some things to consider:
- Finances, Rules and Regulations
- Location
- Tenants
- Operations and Management
Finances, Rules and Regulations
Letting any type of shared housing is a big step away from ‘vanilla’ buy-to-let and there are many different options and strategies to consider.
Do your homework, talk to the experts and make sure you are advised in areas such as building and planning, legal and licencing, financing and insurance and HMO health and safety.
Mistakes can be very costly – and ultimately lives are at stake.
Location
Whilst you may have a great idea for a project in your chosen area, is the need there?
You can run test adverts to gauge a response and speak to local agents to find out what the demand is like.
Contact local housing associations too – many are looking at new ways of working and are keen to form sustainable relationships with the private sector which demonstrate value and benefit on each side.
When investing in HMOs, getting the location right is essential!
Tenants
There are lots of different co-housing communities to consider, the most common (and now, most saturated) market in which to operate, are student lets.
Over the last few years, high-end and ‘boutique’ HMOs have become more and more popular, with investors targeting young professionals and graduates with gimmicks and gadgets such as USB plug sockets and Netflix subscriptions.
The social marketplace has an ever-increasing demand, though this is a notoriously tricky and specialised environment in which to operate.
Operations and Management
The management of properties which are habited by multiple occupants is always going to be more time intensive than that of a traditional family house.
Running costs will be higher and there could be increased instances of breakages or damage and more wear and tear.
If you aim to provide extra facilities, think about the upkeep and maintenance of those too. Who will manage the property day to day? Is there a specialist managing agent in your chosen area?
Putting It All Together
The cohousing or house of multiple occupation model is a great way to maximise both available space and rental return and it’s almost certain to be a way of living that will increase in popularity over time.
Over the next few months I’ll be looking at each in more detail I’ll also be interviewing those that are developing and operating shared housing for all kinds of occupants – please let me know any questions you have on the subject for me to put to the experts.
Get In Touch
I’ll be on hand to answer your questions if you leave them in the comments section below. And, if there are any topics you’d like exploring with the experts I’ll be meeting then don’t hesitate to get in touch either here or on the Property Investments UK Facebook page.
And, of course don’t forget to follow me on Facebook and Twitter – Amy Felicity Vale / @MissAmyVarle