Subscription Living: Ultimate Freedom or Ultimate Lock in
Insights from Hunter Research
At UKReiif we attended a panel chaired by Michele Steel the CEO of Regeneration Brainery, that posed the question of whether subscription living might become a solution to how Gen Alpha may choose to live when they reach renting age in the next few years.
So what is subscription living?
First and foremost, a tantalizing, if not new, prospect for housebuilders. We know the industry feels the impact of the current cohort’s (Gen Z’s) affordability issues coupled with a desire for freedom from traditional models of working and living. Subscription living (also often called Living as a Service – LaaS) is typically renting with all the bells and whistles (bills and services) rolled into a neat monthly cost. The subscription economy has been in full force for a while – think toilet roll, razors, streaming services.
Co-living is a particular sub-set that typically sees renting a bedroom and bathroom with otherwise shared amenities like kitchens, lounges, co-working spaces etc.
So why is subscription and co-living set to gather more with the next generation of renters? Simplicity, flexibility, a desire for immediacy of experience? Let’s explore what we might expect from Gen Alpha.
We should kick off with a giant caveat – it can be extremely problematic to distill an entire generation of people into a tight list of generalisations, but being aware of the macro trends is more beneficial than assuming the category will maintain any kind of status quo.
Gen Alpha – born between 2010 and 2024 – currently 2-16 years old – the generation, as Helen Godwin, Mayor of West of England put it in the panel discussion – that are going to grow up, surrounded by AI, asking ‘is this real?’
Three Trends impacting how Gen Alpha will live
1. Co-living supply can’t keep pace with demand.
Homeownership rates for young adults will continue to fall before any policy-driven correction takes hold, meaning the majority of early Gen Alpha will rent by default, rather than choice. It’s likely co-living will be the dominant early-rental product for Gen Alpha in cities. However, the data on is striking – demand now outpaces current co-living provision by more than 30 to 1, according to a report from Conscious Coliving. As the BTR market continues to grow (boasting over 146,700 completed homes as of January this year*) co-living is emerging as a distinct sub-sector. The value proposition is compelling: according to Knight Frank**, co-living rents average 7% lower than private rented sectorequivalents and 14% lower than BTR when accounting for costs included in the monthly payment. Cities with strong graduate retention rates, such as London, Manchester and Birmingham, are emerging as the key markets. For Gen Alpha entering cities in the early 2030s, co-living may be the default rental form. But without a dramatic acceleration in planning and delivery, the offer will remain concentrated in a handful of cities, leaving most young renters in a traditional market that increasingly can’t serve them.
*Source: Savills
**Source: Knight Frank’s Co-Living Report 2024
2. Gen Alpha will expect homes to work like platforms
Gen Alpha’s baseline expectations for technology integration will be so high that conventional rental stock will feel outdated quickly.
Gen Alpha is growing up surrounded by AI, virtual reality and digital-first experiences. While smart home technology was a novelty for Boomers and became essential for Millennials and Gen Z, Alphas will expect AI-integrated systems that seamlessly manage energy, security and even gamify chores. It’s a baseline expectation, baked in from childhood – not something reserved for the luxury sector. The structural logic of subscription living; one payment, no friction, a managed experience, maps directly onto how this generation already consumes everything else: streaming, gaming, mobility. The risk for developers building conventional rental products today is that by the time Gen Alpha arrives as tenants (starting in the next 5 years), ‘smart home’ features will be the basics not differentiators. The product that will win is the one that feels less like real estate and more like a service.
Source: Green Builder Media
3. The 15-minute city effect
Counterintuitively, the generation most associated with rootlessness may end up more place-attached than previous generations. Subscription living will need a placemaking answer as well as a product one.
Not everything points towards constant mobility. With car ownership fading and the climate crisis a prevalent concern, Gen Alpha is well placed to push for 15-minute cities, where jobs, retail, entertainment and healthcare are all within walking, cycling or scooting distance. If so, the next generation of renters could value embedding themselves in a specific neighbourhood, not just a building. Developments can win by doing a couple of things; being genuinely woven into an urban neighbourhood with clear amenity, transport, cultural offer, and reducing the guesswork by inviting Gen Alpha into the planning. When was the last time you looked around a board room and saw faces of people who are likely to use your BTR or subscription living product? Perhaps it’s time to invite them to the table.
Subscription living is living for your life stage
As panellist Mona Hassan put it – this isn’t a bed for the night. Because of the shape of the world, home is going to become where you work, where you come up with ideas and potentially where multiple generations of your family can live.
Without the financial restriction of a mortgage the idea of subscription living allows you to sign up to a place that fuels the stage of life you’re in.
It’s less about finding a one size fits all approach to housing development and more about nurturing diverse thinking in terms of home use and long term financial commitment.
What might subscription living look like for Gen Alpha?
As mentioned, subscription living often comes in the form of co-living which means lots of spaces and facilities that are shared and multi-purpose – think co-working lounge by day, socialising space by night. As some of the panellists suggested – while affordability may be the driving force for why someone might look at this alternative model of tenancy, the amenities and events provided, from gyms to cooking classes, make it really attractive as a way of building community.
Is there a threat in the interest gap?
It won’t be easy to build places that attract Gen Alpha however. As Helen Godwin noted – Bristol’s biggest city centre regeneration project garnered almost zero curiosity from younger audiences when cranes sprung up across the sky line. Is that because this audience assumes it’s not for them?
Perhaps we need to stop thinking of customer journeys beginning on social, search or websites and start thinking of geography lessons, apprenticeships and the next generation of planners. Involvement might just drive interest in a generation who might presume they’re already out of the race before its even started.
Beyond Gen Alpha
Subscription living might appeal beyond Gen Alpha. Certain populations may have been pushed out to the suburbs thanks to historical urban planning that decentralised residential provision. Young professionals who want to live and work in the city. Downsizers similarly might want to be within walking distance of all the benefits a city can offer. If traditional models of ownership become less ubiquitous, it may create multi-generational subscription living spaces that function like mini communities. The lifestyle offer without the financial burden of a 25 year mortgage could mean we find vertical communities springing up across our city centres.
