Co-living finance for shared living schemes
We arrange development and investment finance for co-living schemes: compact self-contained studios with extensive shared amenity and services, run by a single operator. This is business lending against a development scheme and its operational income, not a personal mortgage.
Funding co-living scheme
Co-living pairs compact self-contained studios with extensive shared amenity and services, lounges, co-working space, gyms, events and a managed community, run intensively by a single operator. It sits within the build-to-rent family but is more operationally intensive than multifamily, closer to a hospitality model in how it is managed, which is the feature that most shapes how lenders and investors underwrite it.
When we say co-living finance we mean the development facility, forward-funding line, mezzanine layer or stabilised investment loan used to fund the scheme as a single operating asset. Lenders read it through the gross development value, the build cost, the net operating income the scheme produces once let and let-up, and the prime co-living net initial yield, with extra weight on the operator and the durability of the amenity-led proposition.
Co-living differs from a house in multiple occupation: an HMO is a shared house with separate rooms and minimal management, while co-living is a purpose-built, self-contained, amenity-rich and intensively operated product. It differs from mainstream BTR in its higher density, its services-led income and its operational cost base. Those features sharpen the gross-to-net and place a premium on the operator covenant.
We are an arranger and introducer, not a lender. We package the scheme, the operator and the numbers so development lenders and institutional co-living funders can price the risk, and we run the whole market rather than approaching a single lender.
What we fund
- Purpose-built co-living schemes with shared amenity
- Compact self-contained studios under a single operator
- Ground-up co-living development finance to completion
- Forward-funded co-living schemes for institutional buyers
- Conversion of office or other stock to co-living
- Stabilised co-living investment finance on a let scheme
Indicative terms
- Loan to cost (LTC)Senior to around 60 to 65% of cost
- Loan to GDV (LTGDV)Around 70 to 75% with mezzanine
- Investment LTVUp to around 60 to 65% of stabilised value
- BasisSized on GDV, build cost, NOI and co-living yield
- OperatorOperator covenant central to the credit case
- Key testsGDV, LTC, NOI, gross-to-net, DSCR, lease-up
- ExitInvestment refinance or institutional sale
Indicative only. Terms vary by lender, operator and home and are not an offer of finance.
How we fund co-living development
We fund co-living on its development cost and its operational trade. For a ground-up scheme we model the gross development value, the build cost and the net operating income the scheme produces once let and let-up, then arrange senior development finance to around 60 to 65% of loan to cost, with mezzanine and equity toward 70 to 75% of loan to GDV. Because co-living is operationally intensive, lenders weigh the gross-to-net closely, operating costs run at the higher end of the BTR range, and they place real weight on the operator covenant that delivers the amenity and services. Where an institutional buyer is in place, forward funding can carry the build in return for the completed scheme. Once the scheme stabilises on a let-up rent roll, a development exit or investment loan re-prices the debt onto the operational income. Every figure is indicative and never an offer; the terms depend on the GDV, the yield, the gross-to-net and the operator, and we run the market to find them.
Lender appetite for co-living schemes
Co-living draws selective but growing appetite, because it is newer and more operationally intensive than mainstream BTR. Development lenders comfortable with operator-led product, including Shawbrook, OakNorth, United Trust Bank and Atelier, fund ground-up co-living on loan to cost and loan to GDV where the operator has a track record, while institutional funders forward fund or acquire completed schemes that value to a prime co-living yield. Knight Frank put prime co-living net initial yields at 4.25% in London and from 5.00% regionally in September 2025, a touch wider than mainstream multifamily, reflecting the operational intensity. Because the income is services-led and the gross-to-net is sharper, lenders weigh the operator covenant and the durability of demand more heavily than on a standard apartment block. As an arranger and introducer with no exclusive tie, we match the scheme and the operator to the funder most comfortable with co-living rather than steering every case to one name.
The co-living market and exit
Co-living is an established but still-maturing part of the UK private rented sector, set against a sector where the private rented share of English households was about 19% in 2024/25 (English Housing Survey). Investor interest has risen as the amenity-led, single-operator model has proven its income resilience. Knight Frank put prime co-living net initial yields at 4.25% in London and from 5.00% regionally in September 2025, the benchmark a completed scheme values against, a little wider than the 4.25% Greater London multifamily yield to reflect the operational intensity. UK PRS rental inflation ran at 4.0% in 2025 (Knight Frank), supporting the income story. A stabilised, well-let co-living scheme with a strong operator is an institutional asset with a clear refinance or sale exit, which is what gives a development lender comfort on the completed position. We structure the funding with that exit in view.
Finance that suits this scheme
- Co-living financePurpose-built debt for ground-up and converted co-living schemes.
- BTR development financeSenior development debt to fund the build of a co-living scheme.
- Forward fundingAn institutional buyer funds the build in return for the completed scheme.
- BTR mezzanine and equityTops up senior debt to reach a higher loan to GDV across the stack.
Fund a co-living scheme scheme
A view on fundability within one working day.
What drives a co-living scheme's numbers
A co-living scheme's economics turn on the gross development value against the build cost, and the net operating income its operational, amenity-led model produces once let and let-up. Because co-living is operationally intensive, the gross-to-net is sharper than mainstream multifamily, the operating cost base for amenity, services, staffing and community management runs at the higher end of the BTR range, so lenders model the NOI carefully and weigh the operator covenant that delivers it. They then capitalise the NOI at a prime co-living net initial yield: Knight Frank put it at 4.25% in London and from 5.00% regionally in September 2025, a touch wider than mainstream multifamily to reflect the operational intensity. UK PRS rental inflation ran at 4.0% in 2025 (Knight Frank), supporting the income story. We model the maintainable operational income and the sharper gross-to-net, because that, alongside the operator, is what supports the debt.
Indicative co-living leverage and rates
Indicatively we arrange co-living development finance with senior debt to around 60 to 65% of loan to cost, and mezzanine and equity toward 70 to 75% of loan to GDV, with the operator covenant central to how far a lender will go. Debt service is sized against the stabilised, let-up NOI and a target DSCR. Once the scheme stabilises, a stabilised investment loan re-prices the debt, typically to around 60 to 65% of stabilised value given the operational intensity. A scheme with a proven operator, a durable amenity-led proposition and a credible let-up earns the keener end; a thinner operator track record pulls leverage back. Forward funding from an institutional co-living buyer can carry the build. These are market-typical, indicative figures and never an offer; because lenders price the operational intensity and the slightly wider yield, the terms depend on the GDV, the yield, the gross-to-net and the operator, and we run the market across each leg.
Frequently asked questions
What is a co-living scheme?
A co-living scheme pairs compact self-contained studios with extensive shared amenity and services, lounges, co-working, gyms and a managed community, run intensively by a single operator. It sits within build-to-rent but is more operationally intensive, closer to a hospitality model. We arrange development and investment finance against the scheme and its operational income, not personal income.
What is the difference between BTR and co-living?
Both are purpose-built rental products under a single operator, but co-living is denser, with compact studios and much more extensive shared amenity and services, and it is more operationally intensive than mainstream multifamily BTR. That sharpens the gross-to-net and places more weight on the operator covenant, and co-living values to a slightly wider yield: Knight Frank put it at 4.25% London and from 5.00% regional in September 2025.
What is the difference between an HMO and co-living?
An HMO is a shared house with separate let rooms and minimal management, whereas co-living is a purpose-built, self-contained, amenity-rich product run intensively by a professional operator at scale. Co-living is funded as an operational BTR asset on its net operating income and operator covenant, not as a small residential let, which is why lenders treat the two very differently.
What are the downsides of co-living for a lender?
Co-living is operationally intensive, so operating costs run at the higher end of the BTR gross-to-net range and the income depends on the operator delivering the amenity and services and keeping the scheme let. It is also a newer product, so the buyer pool is narrower than multifamily. Lenders therefore weigh the operator covenant and the durability of demand closely, which is reflected in the slightly wider prime yield.
Can a co-living scheme be forward funded?
Yes. An institutional co-living buyer can forward fund the development, paying for land and build through to completion in return for the finished scheme, which removes the separate refinance step. Forward commitment is the related route where the buyer agrees to purchase on completion while the developer arranges the build finance. We arrange both and run the institutional market for them.
Funding a co-living scheme scheme?
Tell us about the scheme and the operator and we will come back with a view on fundability and likely terms.