Co-living and hybrid scheme finance
We arrange development, stabilisation and investment finance for developers and investors building or holding co-living and student/co-living hybrid schemes. This is finance to fund the asset as a property investment, not a student maintenance loan or help paying your rent.
Funding co-living schemes
Co-living is a managed rental model in which residents take a private studio or en-suite room and share generous amenity, lounges, kitchens, gyms, coworking and events, under a single inclusive licence or tenancy. It overlaps heavily with PBSA in design and operation but typically serves young professionals and recent graduates as well as, or instead of, students.
A hybrid scheme runs student and co-living, or student and build-to-rent, product in one building, flexing the resident mix across the year. That flexibility can smooth income but it complicates underwriting, because the asset is neither pure PBSA nor pure build-to-rent and lenders must price the blend.
Co-living and hybrid finance, as we use the term, is the development, stabilisation or investment facility used to build, lease up or hold a co-living or hybrid scheme as an operational asset. The credit case turns on the operator, the amenity offer, the loan to cost or GDV and, above all, the operational underwriting of an income model that depends on management and occupancy rather than a fixed lease.
We present the scheme, the operator and the operational assumptions so lenders can price loan to cost and the exit, and we run the market across development, stabilisation and investment debt, layering mezzanine or equity where the capital stack needs it.
What we fund
- Dedicated co-living schemes for young professionals
- Student and co-living hybrid buildings
- Co-living adjacent to a build-to-rent scheme
- Amenity-led urban co-living towers
- Schemes flexing between student and professional lets
- Standing co-living assets being refinanced
Indicative terms
- Development loan to costUp to 60 to 70% of cost
- Development loan to GDVUp to around 60 to 65% of GDV
- Investment loan to valueUp to around 60 to 65% of value
- TermConstruction term, then 3 to 7 years investment
- Mezzanine or equityWhere senior debt stops short
- Key testsOperator, amenity, operational underwriting, occupancy
- Income basisInclusive licence or tenancy; operational income
Indicative only. Terms vary by lender, operator and home and are not an offer of finance.
Financing co-living and hybrid developments
We arrange co-living and hybrid finance around the build, the lease-up and the operating model. For construction we place development finance to around 60 to 70% of loan to cost, or roughly 60 to 65% of GDV, drawn against a monitoring surveyor, with the GDV underpinned by the operational income model rather than a fixed lease. Once built, short-dated stabilisation finance carries the scheme through lease-up, then we place an investment term loan to around 60 to 65% of value once occupancy and income are proven. Because co-living income depends on management and amenity rather than a covenant, lenders apply firmer operational underwriting, so where senior debt stops short of the capital need we layer in mezzanine or equity. We frame every figure as indicative and never as an offer.
What lenders assess in a co-living scheme and operator
Lenders underwrite co-living and hybrid schemes on the operator, the amenity offer and the durability of the operational income, then size loan to cost and GDV. They scrutinise the management model harder than a leased asset because the income turns on occupancy and service charge rather than a fixed rent, and on a hybrid they want to understand how the building flexes between student and professional demand. Puma Property Finance, Shawbrook and Secure Trust Bank are active across co-living and build-to-rent-adjacent development, with the institutional funders that back build-to-rent increasingly comfortable with the operational model. As a broker with no exclusive tie, we match the scheme and its operator to the lenders genuinely at home with co-living risk.
Co-living versus PBSA and build-to-rent
Co-living sits between PBSA and build-to-rent and borrows demand drivers from both. It shares PBSA's structural undersupply story, roughly three students per bed across the largest cities (Savills, 2025) and a market near 99% occupancy (Cushman & Wakefield, 2024/25), while serving the wider young-professional rental demand that underpins build-to-rent. The investment market for operational residential is deep, with UK PBSA alone running at around £3.0bn of annual volume (Knight Frank, 2024) and prime PBSA yields near 4.25% (Knight Frank, 2025); co-living typically prices a little softer to reflect its shorter track record and operational intensity. For lenders, a well-located, well-operated co-living or hybrid scheme has a clear refinance or sale exit into a maturing institutional market.
Finance that suits this setting
- Development financeFunds construction of a co-living or hybrid scheme, drawn against cost.
- Stabilisation financeCarries the scheme through lease-up to a term exit.
- Mezzanine and equityTops up the capital stack where senior debt stops short.
- Investment term loansLong-term debt on a stabilised co-living asset.
Fund a co-living schemes home
A view on fundability within one working day.
What drives a co-living or hybrid scheme's numbers
Co-living income depends on management, amenity and occupancy rather than a fixed lease, so the economics turn on the operating model. The decisive factors are the operator, the strength and cost of the amenity offer, and the operational underwriting of an inclusive, service-led income stream that flexes with demand. A hybrid scheme adds the question of how the building moves between student and young-professional lets across the year. Co-living shares PBSA's structural undersupply story, roughly three students per bed across the largest cities (Savills, 2025) and a market near 99% occupancy (Cushman & Wakefield, 2024/25), while drawing on the wider build-to-rent demand base. We model the net operational income after management and amenity cost, because lenders underwrite the operating model, not a covenant.
Indicative co-living and hybrid leverage and rates
Indicatively we arrange co-living development finance to around 60 to 70% of loan to cost, or roughly 60 to 65% of GDV, drawn against a monitoring surveyor, with the GDV underpinned by the operational income model. Stabilisation finance carries the scheme through lease-up, then an investment term loan sits at around 60 to 65% of value once occupancy is proven, a touch firmer than pure PBSA to reflect the operational intensity and shorter track record. Where senior debt stops short, mezzanine or equity tops up the stack. Co-living typically prices a little softer than PBSA's prime 4.25% net initial yield (Knight Frank, 2025). These are market-typical, indicative figures and never an offer; the terms depend on the operator and the operating model.
Frequently asked questions
What is a co-living agreement?
A co-living agreement is a single, usually inclusive, licence or tenancy under which a resident takes a private studio or en-suite room plus access to shared amenity such as lounges, kitchens, gyms and coworking space. Rent typically bundles utilities, internet and services, and terms are often more flexible than a standard tenancy, which suits the young professionals and graduates co-living targets.
What are the downsides of co-living?
From a finance view, the main considerations are operational intensity and a shorter track record than PBSA or build-to-rent. Income depends on management, amenity and occupancy rather than a fixed lease, so lenders apply firmer operational underwriting and may price a little softer. The model is also more exposed to local rental demand than a covenant-backed scheme.
What is the difference between BTR and co-living?
Build-to-rent provides self-contained flats let on standard tenancies with shared amenity as an add-on. Co-living offers smaller private rooms or studios with much more extensive shared amenity and a more inclusive, service-led model. Co-living delivers more beds per square foot and a higher service component; build-to-rent offers more private space and a more conventional letting structure.
What is the difference between HMO and co-living?
An HMO is a shared house let room by room, run by a private landlord with minimal shared service. Co-living is a purpose-built, professionally managed scheme at scale, with extensive amenity and an inclusive offer. They are financed very differently: an HMO like buy-to-let on the property, co-living like an operational PBSA or build-to-rent asset on its income and operator.
How is a co-living development financed?
Usually in stages. Development finance to around 60 to 70% of loan to cost funds the build, drawn against a monitoring surveyor. Stabilisation finance carries the scheme through lease-up, and an investment term loan takes out the development debt once occupancy is proven. Because the income is operational, lenders underwrite the model firmly and mezzanine or equity often tops up the stack.
Funding a co-living schemes home?
Tell us about the home and the operator and we will come back with a view on fundability and likely terms.