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Micro Living: A Solution to the Housing Shortage?

Monday 19 November 2018 Data Insight & AnalyticsDemographic DataProperty Development

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Helen Brewster's picture
By Helen Brewster

Much has been written about the growing trend of micro homes and shared living as a possible solution to the UK’s housing crisis, particularly in urban areas such as London. According to research by the Federation of Master Builders (FMB), more co-living developments and micro homes in urban areas top the list of people’s preferred solutions to the housing crisis. Adapting the successful model used by other sharing economies (such as WeWork) seems like a viable solution to increasing housing density in urban areas where demand is particularly high.

People are talking about micro living as if it is a new invention, but as this blog will highlight, there are already tens of thousands of people living in “micro homes” across the UK. In this blog CACI explores where they live, who they are and whether this is a sustainable model going forward. For this piece we will avoid talking about whether the minimum space standards are a good thing or bad thing and focus on understanding the people that are living in these types of accommodation.
 

Defining Micro Living

According to a report conducted by JLL and the British Property Federation, micro living is defined as "housing which does not conform to the current minimum space standards, which is anything smaller than 37sqm." There are three micro living product types: compact living, co-living and shared living.
 

Where are people currently living in micro homes?

Currently there are over 550,000 homes across the UK that fall below the minimum space standard of 37sqm. 28% of these are in London, predominantly in central London locations such as Camden and Westminster. Outside of London, Birmingham and Leeds have the highest proportions of people living in micro homes.

Count of Micro Homes

Source: CACI/EPC Data
 

Who lives in micro homes?

Using CACI’s Acorn segmentation we are able to look at which particular demographic groups live in micro homes. Acorn is a geodemographic segmentation of the UK’s population. It segments households, postcodes and neighbourhoods into 6 key categories, 18 groups and 62 types. By analysing significant social factors and population behaviour, it provides precise information and an in-depth understanding of different types of people.

There are 550,000 micro homes in the UK

Of the 550,000 micro homes in the UK, almost 75% of these fall into one of 6 demographic groups, which can be clustered together in 4 broad segments.  Young city professional and pensioners are obvious occupiers of these homes, however the biggest proportion of those living in them fall into lower affluence groups, with Young Hardship and Difficult Circumstances accounting for 24%. Whilst it is likely that some people are making lifestyles choices to live in these small properties, it is clear that others simply have no choice. Difficult Circumstances are likely to have children, therefore overcrowding in these small homes is a particular concern.

View full size image

Source: CACI Acorn, CACI/EPC data
 

What do these people value when looking to move house?

Inevitably there are several factors that come into play when people are choosing a property, however this clearly varies by demographic in terms of both age and affluence. Every individual mover is looking for something slightly different. For example, while high-speed internet is an increasingly high priority for all Acorn groups, it’s most important for Student Life and City Sophisticates- the groups who use the most internet. Proximity to leisure facilities and commuter links will likely appeal to younger working demographics, while families and retirees are much more likely to want to be close to amenities like parks, schools and GP surgeries. However, across all Acorn groups, size is the most important factor, but this varies by life stage. The size of a property is only the 10th most important factor amongst 18-24 year olds when they move home, and ranks 6th for those over 65, thus illustrating that micro living works at both ends of the age spectrum.

Source: CACI How We Live 2018
 

Conclusion

As the UK continues to experience a housing shortage there is clearly a need for smaller homes, particularly in urban areas where demand is high and space comes at a premium. Whilst micro living may be a viable solution to this, it is clearly only suited to certain demographics, and for those living in them it should be a lifestyle choice and not a necessity.

 

CACI Hot 100 Residential Index

People are talking about micro living as if it is a new invention, but in this blog we highlight, there are already tens of thousands of people living in “micro homes” across the UK, and explores where they live, who they are and whether this is a sustainable model going forward.

Micro Living: A Solution to the Housing Shortage?

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